Rhodes Food Group Holdings Ltd., a South African producer of canned fruit and ready meals, plans to raise 600 million rand ($56 million) in a share sale to trade on the Johannesburg Stock Exchange.
Rhodes Food will sell new stock comprising about 25 percent of the existing shares, according to a statement e-mailed by Morgan Stanley, which is joint global coordinator and bookrunner on the offering, with FirstRand Ltd.’s Rand Merchant Bank and Renaissance Securities.
The company will use the money raised to pay back debt, fund growth and settle shareholder funding that arose from a management’s buyout of a 29 percent equity stake in 2012, it said. Rhodes has exclusive arrangements with Woolworths Holdings Ltd. to provide ready-made meals and to supply Ayrshire dairy products in the Western Cape and Eastern Cape.
“The proceeds of the primary offer will further strengthen the balance sheet and fund additional investment to accelerate our strategic growth plan, which includes organic and acquisitive expansion,” Rhodes Food Chief Executive Officer Bruce Henderson said in the statement.
The company’s earnings before interest, tax, depreciation and amortization were 195 million rand in the nine months to June 30. Rhodes Food’s Ebitda compounded annual growth rate was 49 percent from 2011 to 2013, it said in the statement.