Powered by Africa Business Communities
South African supermarket chain Shoprite Holdings said it will raise up to $1 billion by issuing new shares and convertible bonds to strenghten its balance sheet and help fund potential acquisitions.
Shoprite, which has been ramping up operations in African countries beyond its home market, said in a statement it plans to issue up to 27.2 million new shares, equal to about 5 percent of its current shares.
The grocer said it would also issue 4.5 billion rand of convertible bonds, bringing its total fundraising to 8 billion rand ($1.05 billion).
The shares and bonds will be offered to certain institutional investors and not open to the public, Shoprite said.
Shoprite, which reported a 19 percent rise in first-half earnings last month, runs about 950 supermarkets, with 729 of those in South Africa.
It has announced plans to open 12 more stores outside of South Africa by the end of June, including in the Nigerian cities of Illorin and Abuja. It also plans to enter the Democratic Republic of Congo.
Shoprite is likely to face tough competition in Africa following Wal-Mart's entry into the continent, after the U.S. giant's 51 percent purchase of discounter Massmart.