Cartrack raises cash ahead of Nasdaq debut


Cartrack raises cash ahead of Nasdaq debut


Published Date: 2021-04-06 | Source: Stephen Gunnion | Author: Stephen Gunnion

Cartrack raises cash ahead of Nasdaq debut

The vehicle telematics group has sold over a million shares pursuant to its initial public offering.

Cartrack's holding company Karooooo raised $29.4-million (R440-million) from new investors ahead of its listing on the Nasdaq market in the US last week. Karooooo sold 1.05 million shares at an offer price of $28 pursuant to the initial public offering (IPO).

Karooooo, which holds most of Cartrack CEO Zak Calisto's interests in the vehicle telematics group, said the underwriters of the IPO also had the option to buy up to an additional 157,500 shares from Karoooo. It said the broader shareholder base would satisfy JSE requirements for public shareholders to hold at least 20% of shares in issue on the SA and US share registers.

In February, Cartrack's shareholders voted overwhelmingly in favour of the plan, which will result in Cartrack delisting from the JSE on 22 April. Current Cartrack shareholders will be entitled to utilise up to a maximum of the proceeds they receive from the offer to subscribe for Karooooo shares. They'll be entitled to subscribe for 1 Karooooo share for every 10 Cartrack shares held, which will result in the value of their effective interest in Cartrack remaining unchanged after full reinvestment and prior to any potential capital raise that may be undertaken by Karooooo.

The reinvestment offer closes on 16 April. Minority shareholders who don't plan to remain invested have been offered R42 per share to buy them out. The $28 offer price in the US is equivalent to the offer price for the reinvestment offer - allowing for the 10-for-1 consolidation - based on the exchange rate of R14.9959/$ on 26 March.

Cartrack said listing on the Nasdaq Global Select Market, with a secondary inward listing on the JSE, would align its corporate and operating structure with its growing international operations and global growth strategy, while providing access to global technology infrastructure and research and development. It will also help expand its investor base, provide access to global capital markets and potentially lead to a rerating of its valuation.

Calisto and Karooooo, who own a combined 68% of Cartrack's stock, didn't vote in February's scheme of arrangement. Shareholders holding about 80% of the remaining stock had already undertaken to support the transaction, as well as the reinvestment option.

Cartrack's shares closed 7.1% down at R64.99 on Thursday. The announcement was made after the close of trade.


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