New Vision rights issue over-subscribed by sh1b

Aug 23, 2008

THE New Vision rights issue that closed on August 13 has been over-subscribed by sh1b, Robert Kabushenga, the chief executive officer, has said.

By Sylvia Juuuko

THE New Vision rights issue that closed on August 13 has been over-subscribed by sh1b, Robert Kabushenga, the chief executive officer, has said.

The company has raised sh29.116b, which is above a targeted sh28.050b and a 4% over-subscription.

“With the success of this issue, we intend to transform this organisation into a formidable regional multi-media establishment,” Kabushenga said.

“This is a demonstration of the confidence that our shareholders and regional investors have in the board and management of the firm. We are determined to take the organisation to greater heights.”

The New Vision offered shareholders an opportunity to purchase additional shares at a discount of sh1,100.

Proceeds from the rights issue will go towards the purchase of a high performance printing press, in addition to pre-press upgrades and investment into additional office space, radio and television projects.

This is the second rights issue in the history of the 10-year old bourse after Uganda Clays. Both have been successful and over-subscribed.

Njoroge Ng’ang’a, the general manager of Dyer& Blair, said the over-subscription signalled the coming of age of capital markets as the preferred avenue for raising funds.

“Given the numerous regional capital market activities during this time, we are proud that we were able to surpass the target by over sh1b. We have the entire capital market fraternity and our transaction brokers to thank,” he said.

Dyer & Blair were the transaction advisers and lead sponsoring brokers.

Jimnah Mbaru, the chairman and chief executive of Dyer & Blair, said the transaction was unique because the Government as a majority shareholder allowed the public to increase their stake in the company.

“The Government’s action is a strong endorsement of capital markets. All the Government’s 20,400,000 rights were traded. This trust will set a strong example of how governments can boost revenue collection through the stock exchange,” Mbaru said.

The Government’s shareholding in The New Vision is 53%.

The rights issue, which started on July 10, offered shareholders an opportunity to buy one additional share for every two shares held. Over 25 million shares were offered while 26,469,441 were subscribed for.

Of these 1,694,000 were applications for additional rights, of which 42.75% will be allocated. Additional rights available for allocation were 724,209.

“This transaction was unique because the majority shareholder, the Government, opted to allow the investing pubilc to add to their stake in the company,” David Ssebabi, the acting board chairman, said. “This contributed significantly to turnover at the exchange while meeting the Governmnet’s objective of strategically divesting from efficiently run companies.”

Dyer & Blair received the majority of the share applications, which amounted to 21,361,620. It was followed by African Alliance, which received 1,756,292. Renaissance Capital received 1,679,074 applications, while MBEA Brokerage Services got 993,515.

Equity stock Brokers received 295,362, Baroda Capital Markets 213,503 and Crane Financial Services 170,425.

Gervase Ndyanabo, the company secretary, said the company would meet the set targets of refunding shareholders who subscribed for more shares.

Refunds will be processed from August 29 along with issuance of new share certificates. The new shares will commence trading on September 8.

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