In the Rights Issue,TPSEAL is offering by way of rights 24,701,774 New Shares and investors are being given the opportunity to subscribe for New Shares at a price of KES 48.00 per New Share, on the basis of one (1) New Share for every five (5) Ordinary Shares they hold at the close of business on 29th July 2010 and so in proportion for any other number of Ordinary Shares then held (taking into account the New Ordinary Shares allotted pursuant to the Bonus Issue). Fractions of New Shares will not be issued and Eligible Shareholders' entitlements will be revised downwards to the nearest whole number and such fractional entitlement will not be allotted to the Eligible Shareholder. Once the basis for the entitlement is declared, the Company will not make any subsequent alterations to such entitlements. Each share shall be payable in full upon acceptance not later than 3.00 p.m. on 31st August 2010. The procedure for acceptance, payment or renunciation of the Rights is contained in Section VI Memorandum and the PAL. The New Shares when fully paid, issued and allotted will rank pari passu (equally) in all respects with the Existing Shares. All rights attaching to the Existing Shares with regard to voting, dividends, liquidation proceeds and pre-emption in future capital increases are as set out in the extract of the Company's Articles of Association which is provided in Section X of this Information Memorandum. The New Shares will qualify for dividends with effect from the financial year ending 31st December 2010 and thereafter.
Reasons for the Rights Issue
The Rights Issue is being launched in order to raise additional funds for refurbishment of existing properties in the Serena portfolio, strengthening the Serena Hotels East African circuit, maintaining the levels of debt within the Group at a sustainable level and providing new funds for expansion of the Groups operations in the region.
TPSEA will acquire 100% ownership of Jaja Limited as a special purpose vehicle by Tourism Promotion Services (Kenya) Limited, to undertake development of three properties in Nanyuki, Nakuru and Elementaita. Serena's presence in this area will result in enhancing the safari circuit in Western Kenya in line with the Company's Strategy. Jaja Limited is a non-private company wholly and beneficially owned by TPS (K) . Pursuant to the regional expansion policy, the Company, through its subsidiary TPS (T), has also entered into a joint venture agreement to acquire 51% ownership of Upekee Lodges Limited which owns and operates two properties in southern Tanzania (Mivumo River Luxury Lodge and Selous Wildlife Camp).
TPSEA will also utilise part of the funds raised by the Rights Issue to acquire, through TPS (T) the assets of two lodges located in northern Tanzania - Mountain Village (Arusha) and Mbuzi Mawe Tented Camp (Serengeti). The addition of the four properties in Tanzania will position TPS (T) ahead of its competitors in terms of circuit and product offer.
TPSEA will also inject part of the proceeds of the Rights Issue into TPS (R) as equity, to provide funds for Phase II of the Kigali Serena Hotel project. This will include the refurbishing of Kigali Serena's entrance and lobby area, repositioning of the lifts and creating of a new residents' lounge. The equity injected into TPS (R) will also be used for the development of a new lodge near the gorilla's viewing site. Part of the money raised from the Rights Issue will also be used for the refurbishment and expansion of the Nairobi Serena Hotel.
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