Brait has announced plans for a R2.5bn rights issue to lower its debt and and to pay its portion of a separate rights issue in Virgin Active.
Brait, the investment group that has South African entrepreneur Christo Wiese as its biggest shareholder, is planning a R2.5 billion rights offer ahead of a listing of Virgin Active Group.
In its annual results for the year to March 31 on Thursday, the company said that it is in the final stages of a strategy to unlock value for shareholders through the distribution of its remaining assets to shareholders, and that the rights offer is part of this strategy.
Brait’s share price fell by more than 11% to 204 cents on the JSE after announcing the rights issue and despite a strong financial performance over the past year by the company's investments.
Brait's directors said what still needs to be done in their value unlock strategy is for Virgin Active to be positioned for a listing or sale of the business, the stake in the UK retail chain New Look to be sold, and residual debt to be repaid to facilitate the unbundling of the remaining listed assets to shareholders. The investment in Virgin Active makes up 54% of Brait's net asset value.
