New Mauritius Hotels set for bonus issue & rights issue to raise funds to reduce debts
New Mauritius Hotels is set for a bonus issue to improve its liquidity position on the stock exchange and a rights issue totalling Rs 1.77 billion in order to reduce its debt level which had accumulated upon major projects being undertaken since 2007, in Trou aux Biches, Les Salines and in Morocco’s Royal Palm Marrakech. (Image: kenwoodtravel.co )
Mauritius-based hospitality major New Mauritius Hotels (NMH) is setting out to clean up its financial slate after being heavily indebted since 2007, triggered byhuge investments in numerous large-scale projects in Trou aux Biches, Les Salines and in Morocco’s Royal Palm Marrakech.
Owing to such heavy investments, the group, which runs the Beachcomber brand in Mauritius, sees itself confronted with a cash flow problem and has to find the ways and means to reduce its financial burden.
In the latest Beachcomber news release, Marcel Masson, financial director of the group, explains that the financial expenses have entitled debt obligations which, in turn, have exerted strong pressure on the group finances,triggering a vast program of financial restructuringaimed at considerably reducingthe debt burden by September, 2019.
The financial restructuring program of NMH consist of a bonus issue of 322,847,072 new ordinary shares in the proportion of two new ordinary shares for each ordinary share of the company held on Friday, 12 June 2015. The bonus issue is expected to improve the liquidity position of the company on the Stock Exchange of Mauritius (SEM).
Besides, the financial restructuring also involves a rights issue of 161,423,536 redeemable convertible non-voting preference shares totalling Rs 1,775,658,896. These will yield a cumulative dividend at the rate of 6% p.a. at an issue price of Rs 11 each to the shareholders of the company in the proportion of 1 preference share for each ordinary share held on Friday 12 June 2015.
MCB Stockbrokers Ltd will underwrite the rights issue and will subscribe for, or procure the subscription of all preference shares not taken by the shareholders.As at this date, the Board has received an indication from the company’s major shareholders (totalling circa 35% of the Company’s share capital) that they can subscribe to a total amount of approximately Rs 1 billion of preference shares, including excess preference shares.
The fully paid preference shares will be listed and traded on the Official Market of the SEM as from 10 August 2015.
In this respect, the NMH management has already begun discussions with its respective banks to put in order the repayment of debts and manage the funds generated by the company.
It is to be noted that the proposed bonus issue and rights issue are subject to the approval of shareholders of NMH, such that shareholders will be invited to attend a special meeting on 26 May 2015 to vote on the proposed bonus and rights issues.
If you want a copy of the prospectus, click here.
About the company:
New Mauritius Hotels Limited, incorporated on 24 December 1964, is a public company listed on the Official Market of the Stock Exchange of Mauritius Ltd.
The company owns and operates eight resorts in Mauritius, one in Seychelles and one in Morocco under the Beachcomber brand, totalling 2,063 available room keys as at 30 September 2014.