Ellies Plans to Double Debt for Acquisition

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Ellies,Debt,Acquisition

South African electronic equipment manufacturer, Ellies, plans to increase its debt to acquire Bundu Power, a company specializing in alternative energy products. The acquisition aims to help Ellies return to profitability.

Ellies plans to more than double its current debt to acquire a company worth five times its own value in the hopes of returning to profitability. The well-known South African electronic equipment manufacturer first announced its plan to buy Bundu Power in February 2023. Founded in 2005, Bundu Power specialises in alternative energy products for residential, commercial, industrial, agricultural, and recreational applications.

Its offerings include petrol, diesel, and gas generators in a wide range of capacities, as well as solar pumps, panels, inverters, and batteries. Ellies initially wanted to finance its Bundu Power acquisition with a rights offer — a proposal to existing shareholders to buy shares at a discount to increase their stake and help the company raise funding. Ellies said it would allow shareholders to buy 2.13 additional shares for every share they owned at a price of 7 cents. It aimed to secure R120 million with this approach.However, the share price subsequently crashed to less than the rights offer share price.Ellies planned to make a first payment of R7

 

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