- Truworths Limited successfully concluded its Rights Offer, raising funds through additional share sales to existing shareholders
- The Rights Offer aimed to address challenges from competition and currency depreciation, strengthening Truworths' position
- The strong subscription rate and listing of newly issued shares on the Zimbabwe Stock Exchange show market confidence in Truworths' prospects
Harare- Truworths Limited, a prominent retail company in Zimbabwe, has successfully concluded its highly anticipated Rights Offer, which closed on August 9, 2023. The results of the offer have been announced, showcasing a strong subscription rate and the subsequent listing of the newly issued shares on the Zimbabwe Stock Exchange.
The Rights Offer garnered significant investor interest as the company aimed to raise funds for expansion plans and strengthen its market position. The offer comprised a total of 384,067,512 Rights Offer shares, allowing existing shareholders the opportunity to purchase additional shares at a predetermined price.
The company found itself grappling with intense competition from informal clothing traders and the rapid depreciation of the local currency, which led to frozen Zimbabwe dollar credits and recurring losses. The Zimbabwe dollar crisis was exacerbated by high interest rates which affected servicing of debts by customers.
To address these pressing issues and regain a competitive edge, Truworths Limited formulated the Rights Offer. By offering existing shareholders the opportunity to purchase additional shares at a predetermined price, the company aimed to raise funds to support its operations, counter the competition from informal traders, and navigate the challenges posed by currency depreciation.
Out of the total available Rights Offer shares, 345,971,161 ordinary shares were subscribed, resulting in a high subscription rate of 90.1%. This strong subscription rate demonstrated the confidence and support of the company's existing shareholders in Truworths Limited's growth prospects and strategic direction.
To ensure the success of the offer, an underwriter participated by taking up any unsubscribed shares. The underwriter acquired 38,096,351 ordinary shares, which represents 9.9% of the total Rights Offer shares. This underwriting participation facilitated the completion of the offer and provided the company with the desired capital injection.
The Rights Issue raised an ZWL$2,227,591,570 in line with the Company’s expectations, reflecting the funds raised through the subscription process. This substantial capital infusion will play a crucial role in financing Truworths Limited's expansion initiatives, enhancing its operations, and pursuing strategic opportunities within the retail sector.
Following the successful completion of the Rights Offer, the newly issued shares are scheduled to be officially issued and listed on the Zimbabwe Stock Exchange on Monday, August 21, 2023.
The listing will provide both existing and new investors with an opportunity to trade Truworths Limited shares on the local stock market, boosting liquidity and potentially attracting further investment into the company.
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