Taste prepares to dish up rights shares


Taste prepares to dish up rights shares


Published Date: 2018-01-05 | Source: Stephen Gunnion | Author: Stephen Gunnion

Taste prepares to dish up rights shares

The JSE has approved the company's latest rights issue, its fifth since 2014

Taste Holdings' rights offer, which will see the fast food and jewellery group almost double its shares in issue, has been given the go-ahead to be implemented a week from today.

The group said yesterday that the JSE"s Issuer Regulation Division had authorised the 442 million new shares, which will raise up to R398 million. It's offering the shares at a subscription price of 90c in the ration of 96.29 rights offer shares for every rights offer shares held at the close of business on 12 January.

Taste plans to use the proceeds of the capital raise to settle debt, including its long-term bond debt of R225 million, and fund the continued rollout of Domino's and Starbucks stores. It had planned to sell its luxury goods division, which includes Arthur Kaplan, World's Finest Watches and NWJ, but held back due to the weak economy last year. It says the continued roll-out of Starbucks and Domino's stores is necessary for its food division to become profitable from an EBITDA perspective. It expects the division to achieve a monthly cash breakeven in the second half of the year as long as there's a moderate consumer recovery.

The rights issue is the fifth by Taste since 2014. Shareholders not taking up their rights issue shares face having their holdings diluted.

Its shares closed 3.1% higher at 67c yesterday. They have fallen 67% over the past year.


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