PPC shares close marginally above rights issue price
PPC commenced trading ex-rights on Wednesday, and despite significantly higher-than-normal volumes traded, the stock closed slightly above the ex-rights price at the open.The group recently finalised the terms of a rights offer seeking to raise R4bn through a fully underwritten renounceable offer of 1-billion new ordinary shares to PPC ordinary shareholders, at a subscription price of R4 per rights offer share. SA’s largest cement producer did not comment on the day.The share price closed at R5.94, falling 32.27% from Tuesday’s close."Based on the closing price today, we estimate that the market is pricing the nil-paid letters marginally below where they closed," said Gareth Visser, cement and construction analyst at Avior Capital Markets."Overall, we believe that the size of the rights issue is positive, as it will significantly degear the balance sheet, which should free up cash for completion of PPC’s projects," he said.This is positive for a company that has struggled with debt ...
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