ATH offering shares to pay down debt

Shareholders in Fiji’s biggest telecom conglomerate are being offered more shares for cash.

Amalgamated Telecom Holdings (ATH), which owns all major telecom carriers in Fiji except Digicel Fiji, is listed on the South Pacific Stock Exchange (SPX) and announced this week a 1 share for 6.66 rights issue, at a discount price of F$2 (US$.88) per share.

ATH currently trades at F$2.40 per share, so eligible shareholders who take up the offer will enjoy a 40 cents per share discount (17 per cent), although the end result will see a general dilution of shares as over 63 million new ATH shares will be issued in a bid to raise F$126.76million (US$55.89million).

ATH currently has over 422 million issued shares. 

In the Offer Document for the rights issue, company chairman Ajith Kodagoda said funds raised will be used to recapitalise ATH’s balance sheet by “repaying borrowings, providing funding for capital investments and for general corporate and working capital purposes” and provide the company with financial flexibility. 

Details also reveal that F$100million raised will go towards capital investments while F$26.76million will be working capital. 

ATH is majority owned by the Fiji National Provident Fund (72.2 per cent) and the Fiji Government (17.2 per cent) with the rest held by over 1000 individuals, companies and trust funds in Fiji and the Pacific, including the Samoa National Provident Fund. 

The ATH rights issue will take place between May 18^th and June 18^th.