Pick n Pay, which has 2 279 stores across SA and seven countries across Africa said the rights offer price represents a discount of about 32.48% to the theoretical ex-rights price calculated using this Wednesday's closing price of R27.39($1.51).

Shareholders will subscribe for the new shares in the ratio of 51.11 rights offer shares for every 100 Pick n Pay ordinary shares they currently hold.

The rights offer is fully underwritten by Absa Bank, Rand Merchant Bank and Standard Bank, the retailer said.

Pick n Pay has received a firm commitment from its controlling and founder shareholder Ackerman Investment Holdings to take up R1.011 billion ($55 million) of the offer.

New Chief Executive Officer Sean Summers is tasked with reviving a retail business that has been losing market share to bigger rivals Shoprite and others for more than a decade.

A deterioration in the performance of the group's core Pick n Pay supermarket business resulted in a substantial trading loss in the Pick n Pay division of R1.5 billion ($83 million) and an overall loss at group level of R3.2 billion ($180 million) in the 52 weeks ended February25.

At the same time its net debt escalated to R6.1 billion($340 million) in the year, while the losses incurred also resulted in the need for a non-cash impairment of R2.8 billion($150 million).

These factors have put significant pressure on the group's liquidity and solvency, which have forced the board to announce a two-step recapitalisation plan, comprising of the rights issue and the proposed listing of its discount grocery retailer Boxer.

--Reuters--