Longhorn Publishers rights issue fully taken up

Longhorn Publishers has raised Sh533 million from the sale of new rights with investment firm Centum having committed to take up its entitlement.

The firm had announced it would spend Sh390 million to take up a majority stake in Longhorn Publishers which would make it the biggest subscriber of the rights issue that closed a week ago.

“Longhorn Publishers offered 126 million newly created shares to existing shareholders at a rate of 0.86 shares for every share held, with a target to raise Sh530 million,” the publisher said Monday while announcing the results.

The new shares will commence trading at the Nairobi Securities Exchange (NSE) on May 31.

Longhorn said it viewed the 101 per cent subscription as an indication of confidence especially in the bourse which has witnessed depressed performance in the previous weeks.

Longhorn was the fourth biggest gainer in the week ending May 13 at a share price of Sh4.6 and 16.2 per cent return for the year to date according to Standard Investment Bank analysis.

The group managing director, Simon Ngigi, said the firm will stick to the plans announced during the offer to grow its market share with an emphasis on digital product enhancement and regional diversification.

Longhorn will use up to Sh80 million in regional expansion, Sh100 million towards product diversification and another Sh100 million to retire current debt obligations.

READ: Longhorn bets on digital books to open new revenue chapter

The publisher owes Sh100 million to Nabo Capital, a subsidiary of Centum which deals in asset management for institutions and high-net-worth clients.

The company has announced plans to launch new products including story books and college textbooks.

It also intends to develop proprietary e-learning platforms as part of its drive towards digital educational content.

“At least 10 per cent of the funds raised will go towards enhancing our digital offering by increasing the number of titles we put into the market as well as developing a proprietary platform to enhance the disbursement of this content,” Mr Ngigi said.

He said the company was very confident about the fundamentals of the business that primarily serves education sector which has 10 million primary school pupils and 3.5 million students in secondary schools.

Longhorn posted a 70 per cent jump in after-tax profit for the six months ended December, powered mainly by a 56 per cent jump in turnover of the company.

The company net profit increased to Sh67.8 million compared to Sh39.8 million a year earlier.