Blantyre Hotels (BHL) plc, owners of Protea Hotel by Marriot Blantyre Ryalls, is expected to sell seven billion shares to its existing shareholders through rights issue to raise K62.4 billion.
The rights issue, which was approved at the company’s extraordinary general meeting (EGM) in Blantyre on Thursday, will fund the completion of its four-star 180-bed golf estate hotel, situated on the Lilongwe Golf Club course.
The hotel project is a joint venture of Malawi Stock Exchange (MSE)-listed BHL and Oasis Hospitality Limited.
Through the rights issue, according to newly appointed BHL board chairperson Vizenge Kumwenda, existing shareholders will be offered extra shares at five tambala per share.
He said: “What it means is that the process of raising K62.4 billion can now proceed. Now the board will go back to legal transaction advisers, inform them that we have gotten an approval and the advisers will now start and we will issue a prospectus to enable the public to apply for the shares.”
Kumwenda said the Lilongwe hotel project is expected to be completed in December next year, which is about five months later than the initial deadline of August.
“Initially we expected it to be completed by July or August next year, but because of some delays we faced due to foreign exchange issues, we expect it to be completed by December. We will have to be advised by our professionals if that is attainable,” he said.
Kumwenda said after the rights issue, BHL is expected to own 70 percent of the Lilongwe hotel project with the remaining 30 percent stake owned by Oasis Hospitality Limited.
One of the shareholders, Joe Maere, said in an interview that there is need for the board to consider prioritising individual shareholders who control less than 10 percent of the company’s shares to access more shares during the rights issue and not three institutional shareholders.
One of the institutional shareholders Press Properties Limited has since indicated that it will not participate in the rights issue to enable minority shareholders increase their float.
In an interview, Financial Market Dealers Association secretary general James Mbingwa said in an interview that the rights issue is an opportunity for investors who already have equity interest in the company to increase their shareholding.
He said: “It means BHL will soon announce how many shares each shareholder is going to get per the shares that they currently have.
“In the event that the shareholders don’t agree to increase their shareholding, then it means that the shares will be extended to the public.”
BHL is 34.34 percent owned by Nico Life Insurance Company Limited, 32.15 percent by Africap LLC, 26.30 percent by Press Trust and 7.21 percent by the public.
