Mauritius’ Tropical Paradise considers Rs 125 mn rights issue to boost capital
Mauritius’ Tropical Paradise Co Ltd (TPCL), principally engaged in the operation of Labourdonnais Waterfront Hotel and Le Suffren Hotel & Marina at Caudan, is contemplating raising additional capital of Rs 125 million through a rights issue to finance new projects. (Image:
Tropical Paradise Co Ltd (TPCL), a listed entity which operates in the business hotel sector in Mauritius, is considering an increase in its share capital by Rs 125 million so as to finance developments in the pipeline.
TPCL is principally engaged in the operation of Labourdonnais Waterfront Hotel and Le Suffren Hotel & Marina located at the Caudan Waterfront.
TPCL is listed on the Stock Exchange of Mauritius’ Development and Enterprise Market (DEM), and counts among the top 20 companies on the DEM with a market capitalisation of Rs 803 million at a current trading price of Rs 6.56.
The company shares are traded under the hotel and leisure cluster of the DEM market and there are two categories of listed shares, namely preference and ordinary shares. Currently, the share capital of the company stands at 122.5 million ordinary shares.
Given the company strategy to bolster its capital, TPCL has requested the SEM for approval to proceed with a rights issue and the SEM granted its approval on March 17, 2015.
TPCL will now, upon approval of its shareholders, proceed with a rights issue of 20 million ordinary shares at an issue price of Rs 6.25 each to the shareholders of the company in the ratio of 8 new shares for every 49 ordinary shares held at close of business of 29 April 2015.
To obtain approval of the company’s shareholders, a special meeting will be held on the 10 April 2015 to vote for the issue.
Upon approval of the right issue the company share capital will consist of 142.5 million of ordinary shares and additional capital of Rs 125 million enabling TPCL to finance projects.
From a shareholder’s perspective, the issue will give existing shareholders the opportunity to maintain their proportion of stake in the company as well as acquire additional shares at Rs 6.25, which is lower than the market price of Rs 6.56.