Blue Label raises R900m through new share issue
The share price of Blue Label Telecoms dropped as much as 6.6% on Tuesday morning, after the company said it had raised R900m through an accelerated book-build process.
The funds will go towards the recent acquisition of smartphone distributor 3G Mobile.
Blue Label had announced in July 2017 that it had reached terms to acquire 100% of the share capital 3G Mobile for a total consideration of R1.9bn.
The acquisition was effected through Blue Label’s wholly owned subsidiary The Prepaid Company. 3G Mobile operates in eight Southern African countries, with distribution rights of most major handset manufacturers.
The acquisition would serve as the platform for Blue Label’s expansion into new markets and different hardware products, the company has said previously.
There was strong demand for the book-build, Blue Label said in a statement on Tuesday, which would see the issuance of 72-million shares at a price of R12.50 per share.
The price represents a discount of 2.2% to the 30-day volume weighted average price of a Blue Label share on February 26 2018. Trading of the book-build shares was expected to commence on Friday.
At 9.45am Blue Label’s share price was down 2.64% to R13.30, having earlier reached an intraday low of R12.75.