Shares in York Timber, a solid wood processor, yesterday tumbled to a 14% low after it said the JSE had given it the go-ahead for its right offer to raise R250 million after having met all conditions.
This follows the company announcing on Monday, that York intended to raise R250m by way of a partially underwritten rights offer to qualifying shareholders.
The share fell to a low of R2, but by mid-afternoon had recovered to R2.30 a share, only 1.29% lower.
The company said qualifying shareholders could acquire about 1.5 million ordinary shares with a par value of R0.05 per share in the authorised share capital of York, at an issue price of R1.75 per rights offer share, in the ratio of 43.12791 rights offer shares for every 100 York shares held at the close of business on Thursday, December 15, 2022.
The group this week said the rights offer would be used to preserve the timber volumes of York and its subsidiaries by procuring more timber externally, and would be applied towards capital investment in manufacturing plants.
The rights offer would also provide the company with an opportunity to raise equity capital in order to increase the clearfell harvesting age or the age at which trees were harvested from 20 years to 23 years on York’s Escarpment plantation assets, and increase sustainable annual clearfell volumes in the escarpment by about 85 000m3 per annum, among other reasons.
BUSINESS REPORT