Basil Read Holdings Limited has issued a cash share placement by subscription with the Industrial Development Corporation (IDC) of South Africa.
The IDC has subscribed for new share capital to the extent of R 179.6 million in Basil Read Holdings Limited, after completing a two month evaluation process. Basil Read issued 9.1 million new ordinary shares at a share price of R19,76 per share. Therefore the IDC is effectively an 11% shareholder in the Basil Read Group.
Based on the June 2008 figures, shareholder funds of Basil Read are enhanced through the transaction from
R421.5 million to over R601 million, increasing shareholder funds by 42.6%.
The enlargement of the shareholder funds base, places The Basil Read Group in a position to continue with its longer-term growth objectives. “The increased capital will place Basil Read in a firm position to continue with its future growth strategies,” says Basil Read CEO Marius Heyns.
Basil Read, through its activities in its various divisions, including civil, road, mining, building and developments has had noteworthy success in recent years, but moreover its commitment to accelerating positive sustainable development in South Africa has made it a deserving recipient for IDC funding. As part of its objectives the IDC recognises the importance of a dynamic private sector in securing and stimulating rapid and sustainable economic growth, creating employment and reducing poverty and Basil Read has aligned itself with these objectives. Basil Read has also been identified by the IDC as a worthy candidate of development capital funding.
The strengthened shareholder base will increase the resilience of Basil Read, while the cash injection also provides additional funding to further boost the Group’s liquid cash holdings to the same level as its shareholder funds.
“The direct investment by the IDC in Basil Read has been made in line with its objective of taking stakes in developing companies,” says Sicelo Sikakane, Head of 2010! And Construction Strategic Business Unit at the IDC. “In this instance IDC has identified Basil Read as a deserving example of a group that is directly engaged in infrastructure and construction sectors, two segments that have been added to IDC's funding and investment programmes since 2005.”
Mr Sikakane also says that the objective of the capital increase is to enable Basil Read to further enhance its profile as one of South Africa's first tier civil and construction groups, and to enable its growth and expansion to be taken to the next level from a solid and well funded capital platform," he concludes.
