Starwin Products Ltd., the second-biggest drugmaker on the Ghana Stock Exchange, rose the most in six months after saying it will use funds raised through a rights offer to double revenue by 2014.
The stock rose 25 percent to 5 pesewas by the close in the capital, Accra, the biggest increase since Dec. 27. Starwin shareholders approved a plan to raise 10 million cedis ($4.9 million) by the end of this year in a renounceable offer to existing investors.
Managing Director Kwasi Yirenkyi said in an interview the company plans to use 1 million cedis to pay down debt and the rest to expand machinery and warehouse space.
“If the rights offer is successful, it will help the company to fix problems at its factory, reduce finance cost and thereby increase profit,” Nana Kofi Agyeman Gyamfi, a trader at Accra-based Merban Stockbrokers Ltd. in Accra, said by phone today. “I am sure investors that heard the news yesterday of what they want to use the money for were encouraged.”
Starwin’s shares are unchanged this year. The Ghana Stock Exchange’s Composite Index (GGSECI) is the world’s second-best performing equities gauge in 2013 after Venezuela, rallying 47 percent, according to data compiled by Bloomberg.
To contact the reporter on this story: Moses Mozart Dzawu in Accra at firstname.lastname@example.org
To contact the editor responsible for this story: Vernon Wessels at email@example.com