South African retailer Shoprite Holdings has raised funds to expand its store network, improve its infrastructure and strengthen its balance sheet.
The company has raised capital of about ZAR8bn through a share and convertible bonds offering, which closed last week (22 March). Shoprite will issue 27.1m new shares, or about 5% of total shares outstanding, to generate proceeds of close to R3.5bn. The company will also issue convertible bonds with a nominal value of R4.5bn, the group said.
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Shoprite’s CEO, Whitey Basson, said the “primary purpose” was to strengthen the group’s balance sheet by converting existing short-term funding to longer-term loans and providing funding for long-term investments and growth opportunities.
“The new capital and loan funding will strengthen our balance sheet and will be used to accelerate our expansion plans in South Africa and the rest of Africa in terms of new stores and infrastructure,” he said.
Basson added that funds will also enable the group to “selectively pursue acquisition opportunities” in the future. However, he added the group was not “actively pursuing any acquisition at present”.
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By GlobalData
