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Investrust Bank seeks to raise approximately K400 million in rights issue

Investrust Bank Plc has announced that it will be calling for an Emergency General Meeting (EGM) in Q2 2020 for the sole purpose of approving an approximately K400.40 million through a Rights Issue, according to a statement from the bank.

The EGM is scheduled for Friday 5th June 2020 commencing at 10:00 hours with the purpose of “considering the passing of resolutions to approve the raising of capital in the sum of ZMW 400,497,909.75 (Four Hundred Million Four Hundred Ninety-Seven Thousand Nine Hundred Nine Kwacha Seventy-Five Ngwee) through a 5 for 1 Renounceable Rights Offer by the issuance of 40,825,475 (Forty Million Eight Hundred Twenty-Five Thousand Four Hundred Seventy-Five) ordinary shares of ZMW 1.00 par value each at an Offer price of ZMW 9.81 (Nine Kwacha Eighty-One Ngwee) per share to Shareholders on Record Date (“the Rights Offer”)”, according to a statement issued by the Bank’s Company Secretary Brian Msidi on 13 May 2020.

A rights offering (rights issue) is a group of rights offered to existing shareholders to purchase additional stock shares, known as subscription warrants, in proportion to their existing holdings. These are considered to be a type of option since it gives a bank’s stockholders the right, but not the obligation, to purchase additional shares in the company.

The last time the bank was involved in a capital raising through a rights issue involved its majority shareholder, ZCCM-IH, in 2016. “The Renounceable Rights Offer of 3,499,563 (Three Million Four Hundred and Ninety-Nine Thousand Five Hundred and Sixty-Three) Rights Offer Shares of ZMW 1.00 (one Zambian Kwacha) par value each in the share capital of Investrust, at a subscription price of ZMW 11.44 (Eleven Kwacha Forty-Four Ngwee) per Rights Offer Share, on the basis of 3 new Rights Offer Shares for every 4 Ordinary Shares already held at the Record Date, payable in full on acceptance” , according to a circular issued by the Bank in collaboration with ZCCM-IH in February 2019,

In a rights offering, the subscription price at which each share may be purchased is generally discounted relative to the current market price. Rights are often transferable, allowing the holder to sell them in the open market. With the latest rights issue, Subject to the adoption of the Special Resolution, it is envisaged that the Rights Offer Circular will be posted on or about 10 July 2020 to shareholders. This will provide the details that investors (current shareholders and external investors) that they need to make the investment decision.


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