Crown Paints lists additional shares on the NSE

Manufacturer Crown Paints has listed 71.2 million shares on the Nairobi Securities Exchange (NSE) following the conclusion of its rights issue. The shares floated on the bourse on Thursday after the company after the allotment of the shares to shareholder accounts a day earlier. Crown Paints closed out its rights issue on June 30 with shareholders having accepted 64.3 million shares under entitlement, valued at Ksh.642.7 million. The company however allocated 6.9 million additional shares following the over subscription of its rights issue where shareholders applied for 81 million shares above the 71.2 million shares threshold. In spite of the additional shares listing, the new stock have had a minimal share price dilution effect so far. For instance, Crown’s share price stood at Ksh.22.50 at the close of trading on Thursday from Ksh.24.95 on Wednesday. The share price of firms issuing additional shares through rights issues is typically expected to fall on increased supply of the stock in the market. Proceeds from Crown Paints rights issue have equaled the Ksh.711.8 million sort at the start of the exercise. The funds are expected to be deployed in firming up the company’s capital base which has been significantly dented by the ongoing COVID-19 pandemic.

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