Brait launches R2.5bn rights offer as endgame strategy enters final phase

Investment holding company Brait Plc has entered the final stretch of its long-term wind-down strategy, announcing a R2.5 billion rights offer to eliminate historical debt constraints, recapitalise a surging Virgin Active, and pave the way for a total unbundling of its remaining assets.

The group’s audited financial results for the year ended 31 March 2026 reveal strong operational performance across its major investments, providing a solid operational runway for its ultimate exit optimisation.

Brait’s net asset value (NAV) per share increased by 7% to R3.27, while IFRS headline earnings per share climbed to 34 cents from 23 cents in the prior financial year. Since March 2020, the company has successfully reduced its net debt from R7 billion down to its current level of R1.7 billion.

Brait share price

The mechanics of the ultimate value unlock

To clear the final hurdles of its corporate dissolution, Brait has outlined a multi-step capital restructuring framework. The newly announced R2.5 billion rights offer is priced at R1.51000 per share, representing a 25% discount to the Theoretical ex-Rights Price (Terp) and an implied 43% discount to the post-rights offer NAV per share.

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The board explained the specific goals required to conclude its mandate: “Brait is in the final stages of its stated strategy to unlock value for its shareholders through the distribution of its remaining assets to shareholders.

“Achievement of this requires: optimising the positioning of Virgin Active for a listing or sale of the business; the sale of Brait’s stake in New Look; repayment of any residual Brait debt to facilitate an unbundling of the remaining listed assets to its shareholders.”

The cash raised through the rights offer, combined with R1.8 billion in proceeds recently realised from cashing out a portion of its stake in Premier, will be deployed immediately to fund two primary goals:

• Convertible bond redemption: Brait will completely redeem its outstanding GBP-denominated convertible bonds for £138 million (covering par value plus accrued interest), entirely removing its historical foreign exchange rate risk.
• Virgin Active capital injection: Brait will inject £108 million to fund its pro-rata share of a broader £175 million capital raise for the premium fitness brand.

To ensure execution certainty, Brait has secured an irrevocable underwriting commitment from billionaire Christo Wiese’s Titan and its affiliates, who hold 39.3% of the company, to fully back the R2.5 billion rights offer.

Brait has also expanded its revolving credit facility (RCF) limit with lenders RMB and Standard Bank to R2.5 billion at an interest rate of Zaronia plus 267 basis points.

Portfolio breakdown: Operational surges across the board

Brait’s underlying companies delivered highly resilient trading outcomes for the period, marked by significant double- and triple-digit operational growth.

Brait’s underlying investment portfolio demonstrated strong operational momentum, characterised by year-on-year Ebitda [earnings before interest, tax, depreciation and amortisation] growth of 37% for Virgin Active, 18% for Premier, and over 100% for New Look.

Read: Premier posts double-digit earnings growth, lifts dividend

Virgin Active (54% of Brait’s total assets)

The premium health club operator saw a 37% year-on-year surge in Ebitda to £110 million for the period ending 31 December 2025, driven by its ongoing wellness strategy, membership yield growth, and high returns on gym refurbishments.

• Regional occupancy: Active membership metrics reached 623 000 in Southern Africa, 194 000 in Italy, 144 000 in the UK, and 61 000 in the Asia Pacific region as of March 2026.
• Balance sheet optimisation: The broader £175 million capital raise from existing shareholders will reduce Virgin Active’s net debt/Ebitda ratio from a heavy 3.7x down to a sustainable 2.0x based on its December 2025 maintainable Ebitda of £122 million.
• Interest efficiencies: Alongside a full refinancing of its international and South African debt facilities, the capital injection and conversion of £80.4 million in Convertible Preference Shares will collectively slash Virgin Active’s interest costs by £21.5 million per annum. Brait’s stake in the gym group adjusted to 61.3% post-conversion.

Premier (36% of Brait’s total assets)

The JSE-listed consumer packaged goods giant continued its strong operational trajectory despite persistent inflationary pressures on consumers. Revenue climbed 7% to R21.2 billion, while Ebitda expanded 18% to R2.8 billion, pushing its Ebitda margin up to 13.1%.

The performance was primarily anchored by its MillBake division. Brait’s holding now sits at 19% following strategic share placements and cap-and-collar monetisation manoeuvres used to fund the group’s wind-down pool.

Read: Premier posts double-digit earnings growth, lifts dividend

New Look (5% of Brait’s total assets)

Despite a tough UK fashion retail environment that caused overall revenue to drop, New Look’s aggressive cost-right-sizing and digital transformation model yielded a massive operational recovery, with Ebitda increasing by over 100% year-on-year to £37 million.

Its in-app loyalty programme, ‘Club New Look’, expanded to over 1 million members during the financial year.

The post-transaction horizon

Upon successful completion of the rights offer and the subsequent bond redemptions, Brait will emerge with a drastically minimised debt obligation (consisting only of an undrawn R1.3 billion baseline on its RCF), zero British pound exchange rate risk, and three highly capital-efficient underlying assets.

Management anticipates that the combination of expansionary capital expenditure and structural debt reduction will position its unlisted businesses perfectly for optimised corporate listings, independent sales, or direct unbundling’s to shareholders within the next two years.