South African billionaire Christo Wiese’s Brait unveils multimillion-dollar recapitalization plan

Omokolade Ajayi -

Key Points:

  • Christo Wiese-linked Brait SE unveils a multimillion-dollar strategy to slash net debt by $123 million, focusing on bond extensions and equity capital raise.
  • Strong buy-in with 80% convertible bondholders, 73% exchangeable bondholders, and 43% ordinary shareholders backing the initiative.
  • Brait’s plan, including bond maturity extensions and equity raise, underscores commitment to financial stability and shareholder value amid market shifts.

Brait SE, a leading investment holding company with South African billionaire businessman Christo Wiese among its owners, has revealed an extensive multimillion-dollar recapitalization plan aimed at bolstering its financial standing and refining its asset monetization strategy.

The recent move detailed a comprehensive recapitalization initiative designed to reduce the group’s net debt by $123 million, from R6.1 billion ($323 million) to R3.7 billion ($200 million). The plan, following extensive consultations with key stakeholders, encompasses various pivotal measures including bond extensions, debt repayment adjustments, and a rights offer.

Key measures in the recapitalization strategy

The Brait board has green-lit a multi-faceted approach to recapitalization. Notable measures include the extension of maturity dates for convertible bonds and exchangeable bonds issued by subsidiary Brait Investment Holdings, along with significant principal reductions for both.

Additionally, a fully underwritten equity capital raise of up to R1.5 billion ($80 million) will be executed to bolster working capital, facilitate potential investments, and reduce group debt. Moreover, enhancements to Brait Mauritius Limited’s revolving credit facility, including an extension to March 2028 and an increased limit, are integral components of the strategic plan.

Stakeholder support and investor presentation

Brait is gaining strong support from its stakeholders, with commitments from 80 percent of convertible bondholders, 73 percent of exchangeable bondholders, and 43 percent of ordinary shareholders. They’re set to reveal more about their recapitalization plan in an investor presentation on June 4, 2024.

Brait manages a mix of major unlisted consumer businesses like Premier Group, Virgin Active, and Consol. COVID-19 hit these assets hard, extending the time needed for recovery. Hence, the need for a recapitalization plan to provide breathing room for recovery and avoid selling assets at a bad time.

Commitment to shareholder value and financial stability

Brait’s plan to recapitalize signals its dedication to financial stability and boosting shareholder value. Backed by key stakeholders, including prominent shareholder Christo Wiese with a 28.5 percent stake, confidence in Brait’s strategic direction and resilient portfolio grows amid post-pandemic recovery. As Brait steers towards increased growth, this recapitalization plan showcases the company’s proactive stance in adapting to changing market conditions.