FosRich, a distributor of lighting, electrical and solar energy products and a Junior Market listed company, seems set to go back to the capital market to raise funds for expansion and reduce loan funding.
“We are currently examining a possible additional Public Offer (APO) in 2021,” managing director Cecil Foster stated in response to ICInsider.com enquiry as to why would they not take advantage of favourable market conditions currently to reduce the high debt load.
Fosrich borrowed debt totalling $1.6 billion is more than twice the Shareholders’ equity of $869 million at the end of December last year. The company has lent nearly $400 million to a related party that should be repaid this year, with the proceeds expected to reduce the debt load. Even after that, the company will still be overleveraged and will need approximately $500 million in new equity to bring its financing to accepted levels. Any new issue seems unlikely until the last quarter of 2021, with the company annual general meeting that will likely be held in August, as was the case in 2020 that would most likely approve such an issue. Additionally, with the stock now price over $5, a stock split would likely be considered to be approved at the 2021 AGM.
The company had a successful 2020 financial year with increased profits from rising sales and the stock price rising 31 percent so far in 2021.
Fosrich APO coming
March 29, 2021 by
