By: Bianke Neethling – Daily Investor

Pick n Pay announced that it is proceeding with a rights offer that aims to raise R4 billion to help the retailer tackle its growing debt burden.

In a SENS announcement released, Pick n Pay said it has received all the necessary approvals to implement the rights offer.

The offer is now unconditional as its terms have been finalised, and all conditions precedent to the rights offer have been fulfilled.

The rights offer is fully underwritten by Absa, Rand Merchant Bank and Standard Bank.

It will consist of an offer of 252,206,809 renounceable rights to subscribe for new Pick n Pay ordinary shares in the ratio of 51.11 rights offer shares for every 100 Pick n Pay ordinary shares held by Pick n Pay shareholders.

This excludes Pick n Pay shareholders resident or located in the restricted jurisdictions that will be set out in the Rights Offer Circular on the record date of the Rights Offer, 19 July 2024, and such proportionate lower number of rights offer shares in respect of a holding of less than 100 Pick n Pay ordinary shares, offered for a subscription price of 1,586.0 cents per rights offer share.

The rights offer issue price represents a discount of approximately 32.48% to the theoretical ex-rights price calculated using the closing price on Wednesday, 10 July 2024, being R27.39 per share. 

The rights offer shares will constitute approximately 33.8% of Pick n Pay’s post-rights offer share capital.

The salient dates and times of the rights offer remain unchanged from those published in the declaration announcement on SENS on Tuesday, 9 July 2024.

“Acquiring the letters of allocation and the rights offer shares involves risks, and shareholders are advised to examine all the risks and legal requirements that might be relevant in connection with the rights offer, letters of allocation, and the rights offer shares,” the retailer warned. 

“Any decision in relation to the rights offer should be made on the basis of the information contained in the rights offer circular to be issued by the company in connection with the rights offer on or about 15 July 2024.”

Pick n Pay shareholders may commence trading the letters of allocation from 09:00 on Wednesday, 17 July 2024, until the close of business on Tuesday, 30 July 2024 and the rights offer shares from 09:00 on Wednesday, 31 July 2024.