eBusiness Weekly
Clothing retail chain, Edgars Stores Limited (Edgars) said on Tuesday it will soon issue a rights offer to mobilise capital to fund expansion projects.
A rights offer allows existing shareholders to buy more shares in the company at a discount in proportion to their existing shareholding.
The group, which has four main subsidiaries – Edgars, Jet, Edgars Financial Services and its clothing manufacturing unit, Carousel, will become one of the few Zimbabwe Stock Exchange listed companies to hold a rights issue in the past few years.
Company secretary, Vuyo Nxumalo said in a cautionary statement the company was “involved in discussions that involve a potential transaction that may have a material impact on the value of the company’s shares.”
On Monday, Edgars shares were trading at 48 cents on the ZSE.
“The transaction involves raising capital for the company’s expansion initiatives through the issuance of shares by way of a rights offer,” he said.
The group did not, however, reveal the amount that it is targeting to raise.
Edgars has recently been on an expansion drive, having opened new stores in Banket, Chegutu and Kadoma.
Like any other retailer, the firm is also struggling with inflationary pressures that have eroded consumer disposable incomes.
In an earlier update, Edgars group managing director, Linda Masterson said the chain was in need of funding for a variety of programmes, including capital projects, working capital and for the microfinance unit. – New Ziana
