Illovo Sugar has announced plans to raise ZAR3bn (US$389m) by issuing 108m new shares.
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The South African company said the proceeds would be used to fund consolidation of its domestic sugar market and investments overseas.
Outside of South Africa, Illovo has targeted growth in Malawi, Zambia, Swaziland, Tanzania, Mozambique and Mali.
Illovo said that it had committed ZAR2.3bn by the end of March while further expenditure of ZAR1.7bn has since been approved. In addition, Illovo said that other investment opportunities are expected to open up in the “near future”.
However, due to the credit crunch, Illovo said its ability to finance such investment was limited because the cost of debt funding has increased.
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By GlobalDataIn order to ensure growth plans are not affected and future debt/equity ratios remain at “acceptable levels”, Illovo said it considers an equity raising exercise – at a price of ZAR27.69 per share – “appropriate”.
