Cash-poor Consolidated Infrastructure Group (CIG) is getting the financial lifeline it needs, but at a price. The owner of Conlog and ConCo and a player in SA’s renewable energy sector on Friday signed a R300m loan from Canadian investment group Fairfax, at prime plus 4%. The loan is a prelude to an R800m rights offer, which Fairfax has agreed to underwrite and priced at R4 per CIG share. At Thursday’s close of R3.25 the offer represents a premium of 23% and is larger than CIG’s market cap of about R700m. In the event that CIG shareholders approve the deal, Fairfax will earn an upfront fee of 2.5% on the R800m. But Fairfax and CIG also have the option of converting the R300m loan into shares, in which case the interest reduces to prime plus 2%. CEO Raoul Gamsu disagreed that CIG was getting its cash over a barrel. "You have to look holistically as a consequence of the structure we had agreed with our other funders where we would have paid higher rates. Now, the bankers and bondholde...

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