S.Africa’s Advtech to raise $61 mln for schools expansion
South African private education group Advtech plans to raise 850 million rand ($61 million) through a rights issue to fund acquisitions and build more schools, while lowering debt.
The South African private school market is booming as more of the black middle class seek higher quality education, opting out of a weak and under-funded state school system.
Advtech bought a private school in Botswana this year, signalling its intentions to pursue growth beyond South Africa while also expanding by creating more of its existing academies in Africa’s most advanced economy.
“Funds raised will be used to reduce to some extent and restructure current indebtedness, fund capital projects and planned acquisitions,” the company said in a statement.
The company said it planned to spend 1 billion rand more than previously budgeted on expansion and acquisitions.
A plan by larger rival Curro Holdings to take over Advtech creating a $1.5 billion private school giant collapsed in July after parents threatened to pull pupils out of Advtech’s academies over allegations of racial segregation in Curro’s schools.
The right offer is subject to the approval of the shareholders, the company said.
Shares fell 0.9 percent to 12.16 rand by 0940 GMT, compared to a flat Johannesburg All-Share index. ($1 = 13.9070 rand) (Reporting by Zandi Shabalala; Editing by Keith Weir).