Blantyre Hotels Plc (BHL) a Malawi Stock Exchange listed company has announced a K62.4 billion Rights Offer, aimed at raising capital to finance the construction of a new four-star hotel in Lilongwe under the Protea Hotels by Marriott brand. The initiative underscores BHL’s strategic vision to diversify its portfolio and drive revenue growth by expanding beyond its flagship Ryalls Hotel in Blantyre.
Details of the Rights Offer
Offer Size: 5,038,504,230 new ordinary shares at a discounted price of MK12.38 per share.
Offer Structure: 6 new shares for every 1 existing share held by shareholders as of the record date, 15 November 2024.
Green Shoe Option (GSO): The offer includes provisions for additional shares in case of oversubscription, potentially increasing the funds raised to over MK69 billion.
Use of Proceeds
The capital raised will primarily fund:
1. The completion of the Lilongwe hotel, set to open in January 2026.
2. Procurement of furniture, fixtures, and fittings for the new and existing Ryalls Hotel operations.
3. Strengthening BHL’s financial position to manage existing and new obligations.
What is a Rights Offer?
A Rights Offer is when a company gives its existing shareholders the chance to buy new shares in the company before it is offered to the public. This helps the company raise money to fund projects or pay off debts. The price at which the new shares are sold is usually lower than the current market price, making it an attractive option for existing shareholders. If shareholders choose not to buy the new shares, their percentage of ownership in the company will be reduced, because more shares will be issued.
