Letshego Africa Holdings has launched a P800 million rights offer aimed at reducing its debt burden and restructuring the balance sheet as the financial services group continues its shift towards a more focused Southern African business.
The BSE-listed group will issue 1.096 billion new ordinary shares at P0.73 each, representing approximately 50.3% of its existing issued share capital. The offer will be made to qualifying shareholders at a ratio of one new share for every 1.984722 shares held.
The rights offer opens on 23 October 2026 and closes on 6 November 2026. Letshego has secured full underwriting from its largest shareholder, the Botswana Public Officers Pension Fund (BPOPF), meaning the entire P800 million offer is underwritten. BPOPF will receive a 2% underwriting fee if the offer is concluded.
Letshego said the proceeds will primarily be used to reduce borrowings, extinguish debt owed by the company to certain shareholders and cover the costs of the transaction. At company level, Letshego had borrowings of about P3.19 billion, while Group borrowings stood at P8.13 billion at 31 December 2025.
The transaction comes as Letshego completes a major restructuring of its African operations. The company is in the final stages of disposing of its businesses in Ghana, Tanzania, Rwanda, Nigeria and Uganda, with Botswana, Namibia, Mozambique, Lesotho, Kenya and Eswatini forming its continuing operating footprint. Shareholders approved the disposals in June 2026.
The company says the restructuring has materially changed the earnings profile of the remaining business. Continuing operations generated P284 million in profit after tax in 2025, a 362% increase, while the Group's customer deposits increased 64% to P3.5 billion. Within continuing operations, deposits rose 43% to P2.24 billion.
The rights offer is also expected to reduce Letshego's financing costs. The company's pro forma calculations show that applying the proceeds to debt would reduce Group interest expense by P93.2 million, resulting in a corresponding improvement in the reported loss for the year. Group borrowings would fall from P8.13 billion to about P7.36 billion after the assumed debt repayment.
Based on the 2025 audited figures, Letshego reported P2.02 billion in operating income from continuing operations and P689.6 million in profit before tax. After tax, continuing operations generated P284 million, although the Group recorded a loss of P235.5 million after accounting for discontinued operations.
Letshego said the capital raise forms part of a broader strategy to move away from balance-sheet-intensive expansion towards liquidity management, capital preservation and more disciplined capital allocation. The company is targeting a debt-to-equity ratio below 80% by 2029, alongside a cost-to-income ratio of 40% to 45%.
The new shares will rank equally with existing Letshego shares in terms of voting rights and dividends. The rights offer price of P0.73 represents a 13.1% discount to the 30-day volume-weighted average price of Letshego shares as at 28 September 2026.
If fully subscribed, Letshego's issued shares will increase from approximately 2.18 billion to 3.27 billion. The company estimates that the rights offer will cost about P30.4 million, excluding VAT.