•This is by issuing and listing 71,181,000 new ordinary shares on the Nairobi Securities Exchange.
•Move to give the company financial flexibility to mitigate the challenges posed by the ongoing Covid-19 pandemic.
The Capital Markets Authority (CMA) has approved Crown Paints Kenya Plc request to undertake a rights issue to raise Sh711,810,000 (Sh711.8 million).
This is by issuing and listing 71,181,000 new ordinary shares on the Nairobi Securities Exchange.
The rights will be issued on the basis of one new ordinary share for every one existing share.
According to the Information Memorandum, the main aim of the rights issue is to give the company financial flexibility to mitigate the challenges posed by the ongoing Covid-19 pandemic and boost the growth strategy for the company.
The Group’s management plans to use the rights issue funds to facilitate development of new products, retiring of current facilities, and funding regional expansion.
CMA chief executive officer Wyckliffe Shamia said that the disclosures made on the rights issue complies with the requirements of the Fourth Schedule of Capital Markets listing regulations of 2002.
''The Authority had reviewed the application for exemptions from complying with Regulation 4 of the Capital Markets (Take Over and Mergers) Regulations, 2002 in relation to the intention of the company’s major shareholders, who have undertaken to take up their full rights entitlements,'' he said.
He added that shareholders are also willing to take more than their initial entitlements subject to availability during the rights issue.
Crown Paints Kenya Plc is expected to make bi-annual updates to the authority on use of the proceeds of the rights issue in line with the disclosures contained in the Information Memorandum.