Ellies says its issue of shares to raise R115 million was oversubscribed, as shareholders applied for more than the total amount of stock Ellies was offering.
The company recently announced it would raise money through issuing shares, take on debt from some of its directors, roll over bank debt, and place another 45 million shares with Mazi Capital to raise another R49.5 million.
Ellies chairman Ellie Salkow agreed to lend the group R45 million to fund its consumer business, at the same time guaranteeing Standard Bank an amount capped at R45 million. Executive director Ryan Otto - who is also CEO of Megatron - committed R20 million.
The rights offer comes just after the group reported one of the most challenging periods in its 30-year history and made a R43 million loss in the first half of the year as revenue slumped to R299 million from R406 million. This compared to the gain of R76.9 million it made in the six months to October 2013.
This afternoon, Ellies told shareholders 156.6 million shares were applied for, which represents 149.79% of the rights offer shares. Both Salkow and Otto followed their rights and applied for new shares in accordance with the prescribed ratio in terms of the offer and also applied for additional allocations.
However, Ellies notes there were not enough rights offer shares available to settle the first underwriting commitments, Salkow is still owed R383 418, while Otto is due almost R3 million. These amounts are set to be repaid, says Ellies.
No additional shares will be offered to other shareholders after an additional 104.6 million shares were added to Ellies' share capital.
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