Jasco Provides Details of Planned Rights Offering

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JSE Listed Electronics Jasco Group has announced it is moving forward with a rights offering, first announced last year, as it sought to raise capital to “stabilize” its balance sheet.

In terms of the rights offering, Jasco will issue 157 million new shares. Shareholders will subscribe for shares with subscription rights on the basis of 68.52584 shares for every 100 Jasco shares held.

“The reason the company is undertaking the rights offering is to raise additional capital to stabilize the group’s balance sheet and to proactively reduce debt levels, which, due to the uncertainty created by the pandemic of Covid-19, is considered prudent,” Jasco said. in a statement to shareholders on Monday.

The company expects to raise a maximum of R55 million from the rights offering, which will be used to settle a R20 million corporate bond and further reduce a working capital facility by a minimum of R10. million rand. The remaining R25 million (maximum) will be used for “ongoing general working capital requirements”.

These requirements include investments in Jasco’s communication solutions and power builder project deployments and associated trade creditors in security and fire safety and other operational costs – for example, the costs of restructuring the debt, securities transaction costs and related professional services and advisory fees.

Jasco has already received commitments from some of its shareholders to respect their rights. These shareholders include Community Investment Holdings (CIH) and Harvibase Investments. These two shareholders will subscribe for 25.7 million rights offering shares, equivalent to an amount of R9 million.

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CIH has further agreed to guarantee up to 108 million rights offering shares, amounting to R37.9 million, bringing the total amount for which Jasco has received commitments to R46.9 million. rands.

“The total investment committed by CIH in the rights offering is R45 million, of which R20 million will be deducted from the outstanding balance of the Jasco corporate bond, held by CIH for practical reasons. The remaining R25 million will be in the form of a cash subscription,” the company said.

Jasco will post a good offer circular on its website on Tuesday.

Meanwhile, the company announced that it will issue a business statement for the interim results period to the end of December 2021 by the end of January. This predates the closing of the rights offering on February 4 and will “provide shareholders with necessary guidance” when deciding whether or not to honor their rights. – © 2022 NewsCentral Media

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