Pick n Pay pleased after R4bn capital raise attracts R8bn in offers
Retail group Pick n Pay said on Monday its recent R4-billion rights offer attracted subscriptions of over R8 billion, saying on Monday this is a reflection of strong confidence in its brand and turnaround strategy.
The group said in a statement that 98.7% of shareholders followed their rights in its recent capital raise, with the group receiving R4.3 billion in excess subscriptions.
"We are really pleased with this result," CEO Sean Summers said in a statement. "The successful conclusion of the rights offer demonstrates the market's strong confidence in our iconic brand and in our turnaround strategy," he said. "We can now intensify our focus on our core Pick n Pay retail business."
Expected
The retailer had priced the rights issue at a discount of about a third, and it is the first step in a two-stage recapitalisation plan aimed at reviving its fortunes, the other being a planned listing of its discount store Boxer. This is expected to raise between R6 billion to R8 billion, while the rights offer also comes with the Ackerman family agreeing to give up their voting control.
The proceeds will be used to pay down debt, stabilise the balance sheet and invest in Pick n Pay's turnaround strategy, which follows the group slumping into its first-ever loss in its year to end-February, when it reported net debt of just over R6 billion.
The first priority of establishing new leadership and operational structures in Pick n Pay, strengthened with seasoned executives, is already complete, and the group is seeing measurable improvements in its core Pick n Pay retail business, it said on Monday.
Other parts of the strategy include resetting its store base, either closing certain stores or converting them to franchises or Boxer stores, as well as a plan to up its fresh food offering.
-NEWS24
The group said in a statement that 98.7% of shareholders followed their rights in its recent capital raise, with the group receiving R4.3 billion in excess subscriptions.
"We are really pleased with this result," CEO Sean Summers said in a statement. "The successful conclusion of the rights offer demonstrates the market's strong confidence in our iconic brand and in our turnaround strategy," he said. "We can now intensify our focus on our core Pick n Pay retail business."
Expected
The retailer had priced the rights issue at a discount of about a third, and it is the first step in a two-stage recapitalisation plan aimed at reviving its fortunes, the other being a planned listing of its discount store Boxer. This is expected to raise between R6 billion to R8 billion, while the rights offer also comes with the Ackerman family agreeing to give up their voting control.
The proceeds will be used to pay down debt, stabilise the balance sheet and invest in Pick n Pay's turnaround strategy, which follows the group slumping into its first-ever loss in its year to end-February, when it reported net debt of just over R6 billion.
The first priority of establishing new leadership and operational structures in Pick n Pay, strengthened with seasoned executives, is already complete, and the group is seeing measurable improvements in its core Pick n Pay retail business, it said on Monday.
Other parts of the strategy include resetting its store base, either closing certain stores or converting them to franchises or Boxer stores, as well as a plan to up its fresh food offering.
-NEWS24
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