Paint manufacturer Crown Paints Plc has raised Ksh.642.7 million from its pre-emptive rights issue.
The amount, equivalent to 64.3 million more shares from an initially projected 81 million more shares for a combined Ksh.809.6 million, will be listed on the Nairobi Securities Exchange.
“The total number of shares that were applied for under the Rights Issue was 80,959,470 against an offer of 71,181,000 shares,” Transaction Advisors Bob Karina, Chairman of Faida Investment Bank said.
According to the company, the funds will secure its balance sheet strength to give it a competitive advantage in a competitive market.
“This is a launchpad towards our goal of growing profitability, driving sustainable development and long-term equity value,” Crown Paint’s Group CEO, Dr. Rakesh Rao, said.
Further, it will also be able to invest in its subsidiaries which have hitherto made losses, diversify its product lines to meet changing customer needs, and enable the firm to deleverage and reduce reliance on short-term debt.
“Near-term focus shifts on how the management will effectively deploy this additional capital armour, in light of the headwinds – tougher operations in regional
subsidiaries and political risk that may dampen the construction sector – anticipated to affect the industry,” Analysts from Genghis Capital said in a commentary Monday 19, 2021.
Updated with Genghis Capital commentary