Longhorn cash call delivers Sh533 million

Longhorn Publishers has raised Sh533 million from the sale of new rights issued late last month, with a major boost from interest by investment firm Centum.

Centum had announced that it will spend Sh390 million to take up a majority stake in the publisher, which would make it the biggest subscriber of the cash call that closed a week ago.

“Longhorn Publishers offered 126 million newly created shares to existing shareholders at a rate of 0.86 shares for every share held, with a target to raise Sh530 million,” the firm said Monday while announcing the results.

The new shares will commence trading on the Nairobi Securities Exchange on May 31.

The company said it viewed the 101 per cent subscription as an indication of confidence especially in the bourse, which has witnessed depressed performance in the previous weeks.

Longhorn was the fourth biggest gainer of the week ending May 13, with a share price of Sh4.6 and 16.2 per cent return for the year to date according to a Standard Investment Bank analysis.

The publisher’s managing director, Mr Simon Ngigi, said the firm will stick to the plans announced during the offer to grow its market share with an emphasis on digital product enhancement and regional diversification.

Longhorn will use up to Sh80 million in regional expansion, Sh100 million towards product diversification, and another Sh100 million earmarked to retire current debt obligations.

The publisher owes Sh100 million to Nabo Capital, a subsidiary of Centum, which deals in asset management for institutions and high-net-worth clients.

The company has announced plans to launch new products including story books and college textbooks.

It also intends to develop proprietary e-learning platforms as part of its drive towards digital educational content.

“At least 10 per cent of the funds raised will go towards enhancing our digital offering by increasing the number of titles we put into the market as well as developing a proprietary platform to enhance the disbursement of this content,” Mr Ngigi said.