Crown Paints in rights issue plan
Crown Paints Kenya plans to raise about Ksh712 million through a rights issue. The Crown Paints rights issue seeks to raise money for spending toward reducing the company’s debt and investing in subsidiaries in Uganda and Tanzania.
Further, Crown Paints intends to use part of the rights issue money to expand into new manufacturing areas, such as producing sanitizers. The demand for hand sanitizers has spiked as the country attempts to resume normalcy such as reopening schools and other sectors of the economy amid the Covid-19 cloud. Crown Paints shares are listed on the Nairobi Securities Exchange and trade under “CRWN” ticker symbol.
What is a rights issue?
A rights issue is a method of fundraising by companies. In a rights issue, a company sells new shares to existing shareholders at a special price, often a price below the current market price of the stock.
In the Crown Paints rights issue, the company plans to sell the rights issue shares at Ksh10 apiece, representing a discount of nearly 80% to the current Crown Paints share price. The company plans to offer more than 71 million shares in the rights issue. The paints maker will host its annual general meeting on October 30 at which shareholders will vote on the rights issue proposal.
What is Crown Paints share price today?
Crown Paints shares closed at Ksh42.50 on Monday (October 12). Crown Paints share price is down 32% in 2020, reflecting the impact of the Covid-19 pandemic on the stock market this year.
Should you invest in Crown Paints shares?
When looking for the best companies to buy shares in Kenya, it is better to seek out profitable companies with strong balance sheet. Even best are companies that pay dividends to their shareholders.
Is Crown Paints one of the best companies to invest in Kenya? In the first half of 2020, Crown Paints made a profit of Ksh252.8 million, which increased from Ksh29 million in a similar period in 2019. In 2019 full-year, Crown Paints made a profit of Ksh317 million, which increased from Ksh184 million in 2018.