Johannesburg - Rhodes Food Group, a local producer of prepared meals, plans to raise as much as 1.35 billion rand in a share sale on the Johannesburg Stock Exchange next month.
The company will offer almost 100 million shares at an initial price of 10.50 rand to 13.50 rand, Rhodes Food said today in an e-mailed statement.
That includes 57.1 million of new shares and 42.8 million to be sold by existing shareholders including private equity owner Capitalworks and management.
The proceeds will go toward expanding capacity and reducing debt, the company said.
“We have invested 158 million rand over the past three years in maintaining and upgrading our eight production facilities in South Africa and Swaziland with new technology and processes,” chief executive Bruce Henderson said.
“A further investment of 229 million rand is planned for 2014 and 2015.”
Rhodes Food, based in Groot Drakenstein in the Western Cape province, owns brands including Rhodes, Magpie, Bull Brand and Hazeldene, according to the statement.
The share sale would “create financial capacity for selective acquisitions,” the company said.
Morgan Stanley, Rand Merchant Bank and Renaissance Securities are acting as joint bookrunners.
The listing is scheduled for October 2.
Rhodes revenue increased by 35 percent in the nine months through June to 1.77 billion rand. - Bloomberg News