Capital Markets

CMA gives Longhorn nod for Sh530m rights issue

longhorn

The publisher has appointed Equity Investment Bank as the lead transaction advisor. PHOTO | FILE

The Capital Markets Authority (CMA) has given Longhorn Publishers the greenlight to raise Sh530 million through a rights issue.

The NSE-listed firm said Tuesday the approval paves way for the cash call to enable the company enhance its drive to diversify into the regional African markets, create a new range of products as well as enhance its digital offering.

It plans to issue 126 million newly created shares at Sh4.20 at a ratio of 0.86 shares for every share held.

The firm's Managing Director Simon Ngigi said up to 10 per cent of the funds raised will be used to build on Longhorn’s digital offering, including growing the number of titles on offer and developing proprietary e-learning platforms.

“We are working to enhance our product portfolio, especially bearing in mind the roll out of the government’s digital agenda for schools. We already have digital content that has been approved for use in schools, and we want to build this even further using some of the funds raised,” Mr Ngigi said.

Longhorn intends to use up to Sh80 million for regional expansion while another Sh100 million will go towards product diversification. Another Sh100 million earmarked to retire current debt obligations.

The publisher has appointed Equity Investment Bank as the lead transaction advisor, while Mboya, Wangong’u and Waiyaki and Deloitte are the appointed Legal Advisor and Reporting Accountant respectively.

The BSD Group are the Marketing and Public Relations Advisor, while Sidian Bank (Formerly K-rep Bank) is the receiving bank.

READ: Longhorn’s profit up 70pc on surge in sales