Ellies goes in search of R115 million

Ellies, the JSE-listed electronic product manufacturer and distributor, says it it is looking to raise up to R115 million to further reduce gearing and fund working capital.

The company will also separate the consumer and infrastructure businesses as part of an ongoing restructuring process.

Ellies intends to undertake a fully underwritten rights offer, with the first underwriters being Ellie Salkow and Ryan Otto.

The company will issue an additional 45,000,000 Ellies ordinary shares to Mazi Capital at an agreed price of 110 cents per share. These shares will be settled and listed on the JSE on Thursday, 6 November 2014, increasing the company’s total shares in issue to 348,505,691 shares.

Executive Chairman of Ellies, Ellie Salkow has in his personal capacity committed a R25 million loan facility to fund the Ellies consumer business, while chief executive officer of Megatron, Ryan Otto has in his personal capacity committed a R20 million loan facility to fund the Megatron business, Ellies said.

“This commitment shows the confidence these two directors have in the businesses, and their commitment to rectify the current situation,” said Ellies CEO Wayne Samson.

Ellies further advised that the board has decided to separate the consumer and infrastructure businesses, in order for these to be held as separate wholly-owned subsidiaries. This is in preparation of a further restructuring.

“The reasoning for this restructuring is that each business will be funded on a stand-alone basis,” said Samson.

The company advised that further details regarding the rights offer and the restructuring will be announced in due course.

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Ellies goes in search of R115 million