Is another APO on the horizon? MFS Capital Partners is looking to raise $300 million, but how will they do it?

So I saw this article in the Jamaica Observer recently, written by our colleague David Rose: MFS Capital Partners looking to raise $300 million soon.

If that name sounds familiar, it’s because MFS is the company that acquired SSL Venture Capital last year. They’ve been trading as MFS on the Junior Market of the JSE since August 2022. 

When MFS Capital took over, the company’s focus shifted to providing private equity and private credit in local and international markets. 

According to their annual report, they’re looking to raise funds to secure some acquisitions and have leftover working capital. The article mentions that earlier this year, MFS entered a memorandum of understanding with a micro-financing company to acquire 100 per cent of the company for a price to be determined.

The company, named Micro-Financing Solutions, does private credit, remittances, FX trading and bill payments.   MFS said this deal would boost their numbers a lot! 

So that’s why they’re looking to the market for funds.

The company hasn’t indicated yet how they plan to raise the funds, whether through debt or equity, such as an APO or rights issue. What we do know is they won’t be able to raise more than $388 million because of JSE’s rules.

MFS’s current share capital is around $111 million and the Junior Market cap is $500 million. So there isn’t a lot of wiggle room. 

More details are likely to be revealed in the coming weeks and shareholders will get a chance to vote to approve a fund raise at the next annual general meeting, once that date is set.

MFS Capital Partners closed trading on December 15 at $2.20, down 24% since the start of the year.