Technology group EOH has raised R500 million after its rights offer was oversubscribed.
Given the success of the rights issue, EOH says the underwriters were not required to subscribe for any rights offer shares in terms of their underwriting commitments.
Total demand, including the underwriters’ commitments, for the R500 million shares offered was R1.03 billion, says the company.
EOH announced the cash-raising exercise in October, which saw existing investors buy additional company shares.
It intended to raise up to R600 million to settle the majority of its bridge facility, which EOH says will allow for a debt restructuring at lower interest rates and provide it with the ability to make significant investments in the growth of the business.
An amount of R500 million was to be raised through the rights issue, and an additional R100 million through a broad-based black economic empowerment deal by the group’s strategic partner, Lebashe Investment Group.
The rights offer closed on Friday, with EOH informing shareholders today the transaction was “oversubscribed despite the current tough market conditions”.
Stephen van Coller, EOH CEO, explains the significance of the transaction: “Today, EOH celebrates a watershed moment; a long and difficult chapter has finally closed. We are hugely encouraged that, in this difficult environment, our rights issue has been oversubscribed.
“This incredible vote of confidence from our shareholders in the EOH of tomorrow, and the significant strategic progress the board and management have made, is proof that EOH is investable again.
“Over 91% of shareholders followed their rights, with requests for additional allocations of R220 million. This, along with the R350 million underwriting commitments, means a total demand of over 200% for the offer.
‘I can’t adequately express how thankful I am to our staff, clients, lenders and suppliers for their unwavering support and patience during some uncertain times.
“This incredibly successful rights issue in a very tough economic climate welcomes a new era for EOH, with our now optimised capital structure giving us the ability to invest in our growth, knowing that our strategy for EOH 2.0 has the whole-hearted backing of all our shareholders and lenders.”
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