Big boost for Pick n Pay

Pick n Pay has successfully completed its Rights Offer, with the retailer raising R4 billion in capital with a high subscription rate and overwhelming market support. 

The retailer said in a SENS announcement on Monday, 5 August, that the Rights Offer was 106% oversubscribed, with total subscriptions reaching over R8 billion.

It said 98.7% of shareholders followed their rights, and the retailer received R4.3 billion in excess applications.

Pick n Pay said this underscores shareholders’ strong confidence in the retailer’s turnaround strategy, leadership team and future growth plans.

The proceeds of the Rights Offer will be used to pay down debt, stabilise the balance sheet, and invest in Pick n Pay’s turnaround strategy, which CEO Sean Summers is driving rapidly.

The recapitalisation of the business is one of six strategic priorities – aimed at revitalising and restoring profitability in its core Pick n Pay retail business while driving growth in its high-performing Boxer and Clothing businesses.

The first priority of establishing new leadership and operational structures in Pick n Pay strengthened with seasoned executives, is already complete, and the retailer is seeing measurable improvements in its core Pick n Pay retail business. 

With the successful completion of its Rights Offer, Pick n Pay has now completed the first step to recapitalise the business. 

Step two is Boxer’s initial public offering (IPO), which the retailer said is progressing well and is on track for a JSE listing towards the end of the year.

Pick n Pay plans to list Boxer separately on the JSE in 2024 in an IPO to raise R6 billion and R8 billion.

Another intervention is that 112 Pick n Pay stores will either be closed or converted to Boxer franchised stores.

Summers said the retailer is “really pleased” with the result of the Rights Offer. 

“The successful conclusion of the Rights Offer demonstrates the market’s strong confidence in our iconic brand and in our turnaround strategy,” he said.

“It marks a crucial first step in our recapitalisation plan, positioning the group well to fund long-term sustainable growth.” 

“We can now intensify our focus on our core Pick n Pay retail business. This achievement underscores our commitment to executing our strategy. We appreciate this incredible support from our shareholders.”