Mauritius’ Sun Resorts to issue new ordinary shares to finance restructuring
The hospitality major will raise Rs 1.2 billion to finance the implementation of its new strategy, which includes restructuring of the business into two clusters, funding the renovation of existing hotels, investing in technology and implementing its branding strategy. (Image: Ambre)
Mauritius’ hotel group, Sun Resorts Ltd (SRL), is set to offer new equity shares under a rights issue, the proceeds from which are expected to allow the company to finance the restructuring of its operations.
In line with this strategy, the hospitality major will issue up to 33,333,333 New Ordinary Shares of Rs 10 face value at an issue price of Rs 36.00 each to raise Rs 1.2 billion, further to the approval of the Listing Executive Committee of Stock Exchange of Mauritius (SEM).
The purpose of the share issue is to finance the implementation of its new strategy, which includes restructuring of the business into two clusters, funding the renovation of existing hotels, investing in technology and implementing its branding strategy.
On October 20, 2014, the Listing Executive Committee of SEM has approved the listing of the New Ordinary Shares.
Shareholders of SRL will be entitled to 0.355361 New Ordinary Share for every one Ordinary Share registered in his/her name on December 18, 2014.
Further, the shares will be rounded down to the nearest integer when fractions occur, as SRL will not issue fractional shares.
As from February 23, 2015, the Official List of the SEM will list and trade the fully paid New Ordinary Shares.
Half the proceeds of the rights issue will be used towards reduction of debt to improve gearing; 10% towards acquisition of 50% shareholding in Anahita Hotel Limited; 20% towards the implementation of the business process review exercise as explained above; and 20% towards the soft refurbishment of La Pirogue and Sugar Beach.
The opening of rights subscription will be on January 9, 2015 and the closing date will be on January 30, 2015.
According to the document issued by the Board, shareholders of SRL who opt out of their rights, may freely trade the shares due to them under the rights issue on the SEM as from January 16 to January 22, 2015.
Also, shareholders of SRL who subscribe for all New Ordinary Shares to which they are entitled under the present rights issue may also apply, on the same terms and conditions, for New Ordinary Shares in excess of their entitlement.
The stated capital of SRL is made up of 113,397,435 fully paid up equity shares as on date and, upon completion of the rights issue, SRL will have a stated capital made up of 146,730,768 ordinary shares, if the shares are fully subscribed.
It may be noted that the rights issue will not be underwritten.
Ultimately, the company will focus on three main aspects, namely reinforcing and consolidating the company’s core competencies to gear the organisation towards serving a number of new external; hotel operations; brand differentiation to match the new identity and capabilities; and restructuring and developing a wider hotel portfolio to improve returns and better utilise the assets and competencies.