Luiza Magazine announced on Friday that its board of directors has approved a proposed reverse stock split and approved a private capital increase of 1.25 billion reais to strengthen its capital structure.
The company specified that the split will take place in the ratio of 10 shares to 1 and will concern the current 7,389,952,489 shares resulting from the capital increase. The proposal will however be examined by the shareholders’ meeting.
The retailer’s shares were trading 2.51% lower, at 1.94 reais, on the Sao Paulo Stock Exchange this early afternoon, among the highlights of the decline in Ibovespa, which fell 0.46%.
Earlier in the week, the company reported net profit of 212.2 million reais in the fourth quarter, recouping a loss of 36 million reais suffered a year earlier, helped by cost containment and lower interest rates that supported financial performance.
In the retail sector, on the Sao Paulo Stock Exchange, Casas Bahia recorded a decline of 7.55%. Last year, the rival carried out, among other things, an equity offering to strengthen its capital structure, as well as a reverse split of its shares, but at a ratio of 25 to 1.
CAPITAL INCREASE
The capital increase of Magazine Luiza took place with the subscription of 641,025,641 shares, equal to 100% of the offer, at the issue price of 1.95 reais.
Controlling shareholders took up 66% of the offer, thus increasing their stake by 1 percentage point, to 57.2% of the company. Of the total shares available to minority shareholders, over 75% were subscribed by the market.
The operation “optimizes the capital structure…, reducing financial costs”, specified the retailer, which ended 2023 with 9.1 billion reais in cash. And he added that the resources give “more breathing room” at a time of greater investment in technology.
This, according to the company, includes the expansion of Luizalabs, the evolution of the marketplace platform, improved user experience (UX), advertising (ads), fintech, fulfillment and Magalu Cloud services.
From next Friday the new shares resulting from the capital increase will be listed on the B3 list.
Source: Terra
Ashley is a professional author and journalist, working at 247 News Update. She writes on various topics from economy  news to general interest pieces, providing readers with relevant and informative content. She brings a unique perspective and in-depth analysis to her work.
