Ellies shares fall 20% to R1.13

Ellies shares have fallen to a five-year low as uncertainty prevails among investors. Image: Ellies Holdings

The stock fell to a low of R1.13 and it last traded at these levels in July 2009.

The company‚ which manufactures TV aerials‚ satellite dishes and electrical generators‚ announced that it would sell certain of its non-core assets and implement a rights offer. Details of the size of the rights offer were not given but the deal would be underwritten.

The group also said it would reschedule its debt.

Ellies reported a 68.3% drop in headline earnings per share to 33.46c for the 2014 financial year. Profits were dragged lower by delayed projects‚ a weak consumer environment and its cash-hungry infrastructure unit Megatron‚ which Vunani Securities Analyst Anthony Clark expected to be the asset the company sought to sell.

"Until the sale (and price) of Megatron are revealed alongside the price and depth of the 'suicide' rights issue I'm not prepared to risk buying the stock‚" Clark wrote in a note this week.

Source: BDPro via I-Net Bridge