JSE-listed fleet management company DigiCore will issue more shares to current shareholders to raise R90 million.
DigiCore says it is issuing the shares because it requires a fresh injection of capital to support its “strategic initiatives”. Issuing shares is a cost-effective manner of raising money, the company notes.
The cash DigiCore raises, after expenses, will be used to fund the acquisition of Minorplanet, which has so far been funded through working capital, cash reserves and DigiCore's overdraft facilities.
DigiCore bought a quarter share of UK-based MPS 2010, for an undisclosed amount, in the middle of last year. MPS was created by loss-making Minorplanet Systems and houses all of Minorplanet's UK business, some of its UK assets, including the customer base, and all of its intellectual property.
Company secretary Donald Nieuwoudt explains the Minorplanet deal, and a few later bolt-on acquisitions in the Minorplanet stable, had been funded out of available cash as the acquisition had to be settled quickly.
Nieuwoudt says the rights offer will replenish DigiCore's reserves, as well as be used to fund further potential future acquisitions, both locally and offshore.
Shareholders that opt in will receive 13.78 shares for every 100 shares they own, DigiCore said on Friday. The shares will be issued at 300c each, a 20c discount to DigiCore's closing share price of 320c on Friday.
Coronation Asset Management has agreed to fully underwrite the rights offer should shareholders not take up all the 30 million shares to be issued. The additional shares will be listed on the JSE on 14 February.
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