Ellies Holdings has proposed a R120 million rights issue to fund the initial payment for the 100% acquisition of members' interests Magetz Electrical cc and Power On Wheels for R202.6m. Photo: Simphiwe Mbokazi (ANA)
Ellies Holdings has proposed a R120 million rights issue to fund the initial payment for the 100% acquisition of members' interests Magetz Electrical cc and Power On Wheels for R202.6m.
The proposed rights issues would be through the issue of new Ellies shares at a price of R0.07 per share. Ellies’ share price was unchanged at 11 cents yesterday afternoon. The manufacturer, importer, wholesaler and distributor of lighting, solar, electrical and electronic products and solutions, to both the residential and commercial sectors had announced the signature of a sale of shares agreement regarding the acquisition on February 1 this year.
The acquisition would be settled through an initial payment of R72.6m to be paid on fulfilment or waiver of the conditions precedent to the acquisition, while the balance would be payable through three earn out payments not exceeding R130m for the 2023, 2024, and 2025 financial years.
Mazi Assets Management and Imvula Education Empowerment Trust agreed to underwrite the rights offer on an equal basis, for an underwriting fee of 1.5% of the value of new Ellies shares.
Ellies advised shareholders to continue to exercise caution when dealing in its shares until a further detailed announcement was made.
Magetz Electrical cc and Power On Wheels owns Bundu Power which distributes and rents generators and installs solar and ancillary products.
The acquisition comes while Ellies is going through a difficult financial period after it reported a R35.2 million loss in the six months to October 31 2022, a decline of 74.3% compared to the same period a year earlier.
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