Tropical Paradise gets green light from shareholders for Rs 125 mn rights issue
Tropical Paradise, a listed entity that operates in the business hotel sector in Mauritius, was considering an increase in its share capital by Rs 125 million to finance developments in the pipeline and its shareholders have now given the green light for the rights issue. (Image: Caudan)
Shareholders at Mauritius-based hospitality major Tropical Paradise Co Ltd (TPCL) have unanimously approved a rights issue of 20,000,000 no par value ordinary shares, at an issue price of Rs.6.25 per share, with the new funds of Rs 125 million aimed towards financing expected capital expenditures.
The rights shares will be done in the ratio of eight new ordinary shares for every forty-nine ordinary shares held at close of business on April 29, 2015 as per a communiqué released on 13 April 2015 indicating that the entity has obtained the approval of its shareholders at a special meeting held on 10 April 2015.
TPCL, a listed entity that operates in the business hotel sector in Mauritius, was considering an increase in its share capital by Rs 125 million to finance developments in the pipeline and was waiting the green light from its shareholders to go ahead with the rights issue.
The rights issue will consist of 142.5 million of ordinary shares and additional capital of Rs 125 million enabling TPCL to finance the refurbishment of the Labourdonnais Waterfront Hotel and to restructure and optimise current borrowings of TPCL Group as well as facilitate the financing of expected capital expenditures.
TPCL is principally engaged in the operation of Labourdonnais Waterfront Hotel and Le Suffren Hotel & Marina located at the Caudan Waterfront and 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 6.00.
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 had requested the SEM for approval to proceed with a rights issue earlier this year, and the SEM had granted its approval on March 17, 2015.
However, the company shares are currently trading at Rs 6.00, which is lower than the asking price of the rights issue, making investors reluctant to go for the rights issue if the traded share price on the market remains below Rs 6.25.
- By Wazna Gunga