SEARDEL, the new-look industrial holding company that Hosken Consolidated Investments (HCI) controls, on Monday proposed raising a substantial R5bn in a rights issue.

The announcement said the proceeds from the R5bn rights offer, which HCI will underwrite, will be used to settle Seardel’s R4.5bn debt.

Seardel has pitched the rights offer at 160c/share — a 23% discount to the average price of its N-shares over the past 30 days.

Seardel, which has a market capitalisation of about R2.9bn, is best known as a textile manufacturer with smaller interests in property, toys, stationery and consumer electronics.

But the company sold its remaining loss-making clothing interests to the Southern African Clothing and Textile Workers Union (a shareholder in both HCI and Seardel).

Further, Seardel acquired a 63.9% stake in Sabido Investments. Sabido controls free-to-air television channel, the eNews Channel, radio station YFM and film producer Sasani Studios.

There has been much market speculation around Sabido’s greater media ambitions after a recent launch of a new satellite TV service, OpenView HD, which boasts 15 channels.

Seardel CEO Stuart Queen was not available for comment on Monday. However, the official Stock Exchange News Service announcement said: “The proceeds will be used to settle debt … to achieve an appropriate and sustainable consolidated capital structure.”

The rights offer exercise — offered to existing shareholders at 259 new shares for every 100 held — is priced at the same price at which Seardel issued scrip last year to take a controlling stake in Sabido Investments.

Source: Business Day – BDLive – Marc Hasenfuss