Capital raising gets the backing of four major shareholders
18 May 2023 - 18:18
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The board of Purple Group, the owner of trading platform EasyEquities, will proceed with a R105m rights issue after several big shareholders said they will support the transaction.
Business Venture Investments, Base SPV Partnership A, Gajoder Investments, and Rae’s Creek Trust, which together own 27.12% of the group’s issued ordinary shares, have provided irrevocable commitments, Purple said on Thursday.
Purple shares plunged more than 11% after the announcement.
The company, valued at about R1.5bn on the JSE, said it intends to use the proceeds from the rights issue for local and international expansion, and the “development of strategic projects that will enhance shareholder value and client experience”.
“The rights offer issue price represents a discount of approximately 31.87% to the seven-day, volume-weighted average price of the Purple Group share price, as at market close on Tuesday, May 16 2023. The rights offer shares will constitute approximately 9.25% of the company’s post-rights offer ordinary share capital,” it said.
Purple reported a loss of R15.65m in the six months to end-February, down from a profit of R25.89m in the previous corresponding period as a result of global market volatility, a tough economic environment and increased expenses.
The group, which makes 80% of its money from EasyEquities, said the share trading platform experienced historic lows in traded value relative to client assets as stock markets generally were depressed.
Inflows fell 34.2% to R2.9bn asconstrained consumers had less money to invest.
Purple said in its results statement that “client deposits, the strongest driver of economic activity and revenue on our platforms, came under significant pressure from inflation and with it rising interest rates and cost of living”.
Still, the number of active clients on EasyEquities, increased by almost quarter year on year to 831,082, and clients’ assets increased 15.6% to R42.6bn. The group owns 70% of the investing platform; the balance is owned by Sanlam.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Purple Group to proceed with R105m rights issue
Capital raising gets the backing of four major shareholders
The board of Purple Group, the owner of trading platform EasyEquities, will proceed with a R105m rights issue after several big shareholders said they will support the transaction.
Business Venture Investments, Base SPV Partnership A, Gajoder Investments, and Rae’s Creek Trust, which together own 27.12% of the group’s issued ordinary shares, have provided irrevocable commitments, Purple said on Thursday.
Purple shares plunged more than 11% after the announcement.
The company, valued at about R1.5bn on the JSE, said it intends to use the proceeds from the rights issue for local and international expansion, and the “development of strategic projects that will enhance shareholder value and client experience”.
“The rights offer issue price represents a discount of approximately 31.87% to the seven-day, volume-weighted average price of the Purple Group share price, as at market close on Tuesday, May 16 2023. The rights offer shares will constitute approximately 9.25% of the company’s post-rights offer ordinary share capital,” it said.
Purple reported a loss of R15.65m in the six months to end-February, down from a profit of R25.89m in the previous corresponding period as a result of global market volatility, a tough economic environment and increased expenses.
The group, which makes 80% of its money from EasyEquities, said the share trading platform experienced historic lows in traded value relative to client assets as stock markets generally were depressed.
Inflows fell 34.2% to R2.9bn as constrained consumers had less money to invest.
Purple said in its results statement that “client deposits, the strongest driver of economic activity and revenue on our platforms, came under significant pressure from inflation and with it rising interest rates and cost of living”.
Still, the number of active clients on EasyEquities, increased by almost quarter year on year to 831,082, and clients’ assets increased 15.6% to R42.6bn. The group owns 70% of the investing platform; the balance is owned by Sanlam.
With Katherine Child
khumalok@businesslive.co.za
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