York Timbers has successfully raised R250m in a fully subscribed rights offer approved by the firm’s board in early December.
The JSE-listed forestry and sawmill company raised the fresh capital from qualifying shareholders at a subscription price of R1.75 per rights offer share. That equates to a 33.87% discount to the 30-day volume weighted average price of R2.65 per share on December 1, the day before the offer was approved by the company’s board.
The new stock was issued in a ratio of 43.12 rights offer shares for every 100 York shares held at the close of business on December 15. Since the rights offer was fully subscribed, major shareholder A2 Investment will not subscribe for additional York shares in line with its agreement to underwrite a minimum of R111m and up to about R160m of the rights offer, which closed at 12pm on January 6.
“The board is pleased to advise that York has received overwhelming support in respect of the capital raise and has successfully raised a total amount of R250m,” the company said in a stock exchange filing on Monday.
André van der Veen and Adrian Zetler, directors and shareholders of A2 Investment, subscribed for about R136.24m of the rights offer shares in a transaction completed off-market. Former CFO Gabriël Stoltz, who was appointed permanent CEO in July 2022 after an 11-month search, subscribed for R551,288.50 of the rights offer shares, also in an off-market transaction.
The Mpumalanga-based group has said it plans to use the fresh capital to procure more timber externally in a bid to preserve its current volumes and for much-needed upgrades to its manufacturing plants. The company owns about 58,763ha of Forest Stewardship Council-certified plantations and says the plan will enable it to increase the age at which its trees are harvested from 20 years to 23 years.
The rights offer comes against the backdrop of a tough operational year for York in which higher-than-average rainfall hampered production while industrial action caused weeks of disruptions, negatively affecting its liquidity. For the year to end-June 2022, the 106-year-old forestry group reported a 2% drop in the value of its biological assets.
York’s share price fell the most in a month on Monday, down 6.4% to R2.20.
With Michelle Gumede.
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