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New Vision seeks expansion capital from ordinary shareholders
New Vision, Uganda's latest multimedia player in the information sector, has embarked on a grand plan to amass UGX28bn, which it plans to invest in the expansion of its publishing, radio and television businesses.
The listed company has issued a timetable which its shareholders will utilise to help the company raise the massive capital through a rights issue. A rights issue allows a company to raise additional capital from shareholders by issuing, on a first priority basis, existing shareholders the right to purchase additional shares of the company at a given price, which is a discount of the prevailing market price of the shares.
According to the timetable which has been approved by the Capital Markets Authority (CMA) and Uganda Securities Exchange (USE), New Vision's rights issue is set to open on July 10, 2008 and run for four weeks to close on August 13, 2008.
During the process, UGX25,5m worth of new ordinary shares will be offered by the company at a price of UGX1,100 per share. Each shareholder will be allotted one new ordinary share for every two shares held as at June 26 this year.
The USE announced that the last date for trading in rights at the USE is August 7, 2008 and trading of the new shares at the stock market is scheduled for September 8, 2008.
Robert Kabushenga, the company's chief executive officer, last week, told shareholders that the funds would be used to purchase a new printing press, construct a larger capacity factory and another office block. In addition, it is also expected to finance the media groups' English language, Vision Voice and vernacular, Bukedde FM radio stations which kicked off this year. Vision Television, another unit of the group which is still on test will be another major beneficiary of the capital.
"Our business partners need a total business solution for their communications needs, with one media house knowing that all communication requirements in print and electronic are catered for. This will be a key competitive advantage," Kabushenga told a gathering in Kampala.
Until last month, news about the new investments had kept the company's share price on a rollercoaster ride. The New Visions share price moved from a paltry UGX800 at the beginning of the year, to close at UGX2650 by mid-June. However, the stock is now trading at UGX2,510 following news of the rights issue.
