Serena rights issue gets approval

Regulators have allowed TPS Eastern Africa Ltd, the holding company of the Serena Hotels, to raise additional capital.

The Nairobi Stock Exchange listed hospitality group is seeking to raise about Sh1.2 billion through a rights issue where the current owners will be called upon to buy additional shares at a discounted rate.

The rights subscription price has been set Sh48 per apiece.

The application was approved by the Capital Markets Authority (CMA) and the NSE.

“We believe that the subscription price of Sh48 per share represents good value for shareholders wishing to exercise their rights and we are confident that this offer will be well-received,” said Mr Mahmud Janmohamed, group managing director of TPSEA Ltd.

The hospitality company will now issue 24.7 million new shares to be distributed at a rate of one share for every five held.  

The money raised from the issue will be complemented by long-term borrowing to finance acquisition of 51 per cent of Upekee Lodges Ltd by TPS (Tanzania), acquisition of the assets of Mbuzi Mawe Tented Camp, and Mountain Village by TPS (Tanzania) and buying part of TPS Rwanda.

The cash will also be used to help in expansion and refurbishment of Nairobi Serena Hotel and injecting more money in Jaja Limited, a TPSEA subsidiary used to develop tourist properties in Kenya.  

“We are happy to note that the first half of 2010 has been positive for the industry and the outlook for the second half of the year is at encouraging levels,” said Mr Janmohamed.