Purple Group shareholders overwhelmingly support rights offer

Charles Savage

Purple Group received overwhelming support for its rights offer and has successfully raised R105 million to drive its Easy Group’s growth.

Purple Group launched its rights offer last month, with shareholders having the option to buy new shares at a subscription price of 81 cents per ordinary share.

The company issues new shares at a ratio of just over 10.2 rights offer shares for every 100 Purple Group ordinary shares.

Purple Group said it had received overwhelming support, with gross demand equating to more than 113% of the rights offer.

Purple Group CEO Charles Savage thanked shareholders for supporting the rights offer, saying it shows strong support for the company’s strategy and ability to deliver.  

“The rights offer was an important step in the Easy Group of companies plan to continue driving growth and innovation by investing in new products and services,” he said.

“I am proud of our track record for innovation, growth and delivery, and I look forward to working with and for our shareholders and our wonderful team to build a bright future for the group.”

What the capital will be used for

Savage previously explained that the new capital would be used to fund the growth strategy of the Easy Group of companies over the next three years.

The Easy Group houses EasyEquities and its subsidiaries EasyEquities International, RISE, EasyProperties, EasyCrypto SA, and EasyEquities Australia.

The money will be spent in three areas.

  • 30% to increase the pace of growth on EasyEquities’ South African assets.
  • 30% on new products, like credit and insurance, to deliver to EasyEquities’ customers in South Africa to increase the average revenue per customer.
  • 30% to scale the group internationally, starting with the Philippines and moving into South-East Asia.
  • 10% will be reserved to have the capital to buy distressed assets when the opportunity arises.

Savage is upbeat on the prospects of providing shareholders with a good return on capital through the capital raise.

He cited the R100 million capital raise six years ago to fund EasyEquities when Purple Group’s market cap was R200 million.

“We raised R100 million, and we 10xed [providing a return to shareholders of 10 times, or 1,000%],” Savage said.

He said that when the capital was raised, EasyEquities was tiny, with around 50,000 customers and only Satrix as a partner. “Despite all of that, we could still 10x it.”

Savage is even more bullish on the new capital raise. “What we will do is to more than 10x it,” he said.