CMA approves Standard Group's Sh1.5b rights issue

The Capital Markets Authority (CMA) has approved a request by Standard Group PLC to raise Sh1.5 billion from its shareholders via a rights issue.

Standard Group, a legacy media company that has been facing numerous operational challenges over the past few months, announced that the funds will go towards strengthening its financial position and enabling it to tap into new digital opportunities, in line with its ongoing restructuring efforts.

In a letter addressed to Standard Investment Bank — the lead transaction advisor — CMA Chief Executive Wycliffe Shamiah confirmed that the authority had thoroughly reviewed the application and accompanying information memorandum.

He noted that the regulator was satisfied with the level of disclosure provided, in accordance with the requirements of the 12th schedule of the Capital Markets (Securities) (Public Offers, Listings and Disclosures) Regulations, 2023.

"Accordingly, by exercising the mandate granted under the Capital Markets Act and Regulation 16 of the Capital Markets (Securities) (Public Offers, Listings and Disclosures) Regulations 2023, the Authority has granted approval for the rights issue and the subsequent listing of the additional shares, as outlined in the submitted information memorandum."

A rights issue allows a company to offer existing shareholders the opportunity to purchase more shares, typically at a discounted price, providing a cost-effective way to raise capital without resorting to high-interest borrowing.

Shareholders of Standard Group gave their nod to the capital raise during the company’s annual general meeting held in September.

Standard Group sees the rights issue as a crucial pillar in its revamped long-term strategy. When approving the move, the board noted that the funds would go toward restructuring the company’s balance sheet, positioning it to seize new opportunities in the evolving digital landscape.