Pick n Pay has announced the successful conclusion of its two-step recapitalisation plan, first announced in February of this year, a critical milestone in its strategy to restore the performance of Pick n Pay supermarkets and position the group for long-term sustainable growth.
The company said the recapitalisation plan, completed in just nine months, received strong shareholder support. The Pick n Pay Rights Offer, the first step of the plan, was more than double oversubscribed, and raised N$4 billion in August.
The Boxer IPO, the second step, in which Boxer shares worth N$8.5 billion were placed at N$54, attracted significant investor interest and was multiple times oversubscribed at the very top end of the price range, the company said.
These results reflect shareholder confidence in the group’s strategy and future potential, the company said.
The company said capital raised enables Pick n Pay to repay all of its long-term debt and to convert interest costs to interest earnings, as the business will hold cash reserves critical for its turnaround, including for investment into new stores and store refurbishments, product range development, technology and innovation, and staff training.
Importantly, strong shareholder supports enabled Pick n Pay to retain more than 60% of Boxer, the group’s highly valuable growth asset.
Reflecting on the achievement, Sean Summers, CEO of Pick n Pay, said: “Successfully concluding our recapitalisation plan in such a short space of time is an extraordinary milestone for Pick n Pay. The outcome reflects not only the individual strength of the Pick n Pay and Boxer brands but also the shared belief of our shareholders in our ability to deliver on our strategic goals. I extend sincere thanks to our advisors for their support during this critical period, their expertise and guidance were instrumental in achieving this outcome.”
The company said successful execution of the recapitalisation plan provides a solid foundation for the ongoing turnaround of Pick n Pay, which remains a multi-faceted and multi-year strategy.
“Under the leadership of a refreshed management team, Pick n Pay has made early progress in enhancing its product range, improving its product availability and customer service and advancing its store reset programme, all of which have delivered encouraging early improvements in the underlying performance of the core Pick n Pay business, but with much more to do. This announcement signifies a pivotal step forward in Pick n Pay’s journey to deliver shareholder value and to create a stronger and more competitive future for the Group and all its stakeholders,” the company said. -JSE Securities
