The investment group Brait has announced plans for a rights issue of R 2.5 billion to reduce debt burden and participate in a separate Virgin Active rights issue.
Value Unlocking Strategy
Brait is in the final stages of implementing a strategy to unlock value for its shareholders by distributing remaining assets. The company is also preparing Virgin Active for a potential stock listing within two years.
Brait Chairman Richard Nelson stated in the annual report published on Friday that the investment group's strategy still requires optimizing Virgin Active for listing or sale, as well as selling Brait's stake in the British retail chain New Look and repaying any outstanding Brait debts to facilitate the distribution of remaining publicly traded assets among shareholders.
Virgin Active Financing and Plans
Virgin Active's capital raise of £175 million (R 4.1 billion) is scheduled for completion in August 2026 following approval by Brait shareholders at an extraordinary general meeting on July 16, 2026. This process is part of Brait's broader R 2.5 billion rights offer announced on June 18, 2026, aimed at reducing Virgin Active's debt load ahead of its planned listing in 2027–2028.
According to Nelson, to optimize Virgin Active before a potential IPO, it is preferable for the business to pay down some existing debt to achieve an appropriate level of financial leverage. The capital raised by Virgin Active will fund the club refurbishment plan and the new club launch strategy.
Financial Operations and Results
Virgin Active is in the final stages of refinancing its existing South African and international credit lines. Combined with the capital raise, this will provide annual interest savings of £14 million. Brait's R 2.5 billion rights offer is offered at a price of R 1.51000 per share, representing a 25% discount to the theoretical no-rights price based on the five-day volume-weighted average price of R 2.23270. This implies a 43% discount to the net asset value per share after the rights issue.
Brait has secured commitments from Titan and other shareholders, who collectively own over 90% of Brait's ordinary shares, to underwrite the R 2.5 billion rights offer and vote in favor of the ordinary resolution. Following the rights issue, Brait will repay its convertible bonds totaling £138 million. In the 2026 financial year, Brait monetized part of its Premier stake, receiving R 1.8 billion through a public market share placement (R 1 billion) and a 'cap and collar' structure (R 0.8 billion).
The rights offer and proceeds from Premier, along with the increase in the existing revolving credit facility (unused as of March 31, 2026), will finance the repayment of convertible bonds and Brait's contribution to Virgin Active's capital raise. After these transactions, Nelson said Brait will significantly reduce its debt, eliminate currency risk associated with sterling-denominated convertible bonds, and possess three well-capitalized businesses demonstrating strong performance and appropriately positioned for optimized exit or spin-off.
Individual Business Performance
Premier demonstrated consistently high operational performance in 2026, showing revenue and EBITDA growth of 7% and 18% year-on-year, respectively. The main driver of growth in Premier remained MillBake, and the expansion of the Aeroton mega-bakery capacity supported growth in the 2027 financial year. The RFG deal was closed in March 2026, and business integration is progressing fully.
New Look's trading during the festive quarter met management expectations, allowing the business to achieve an EBITDA of £37 million for the year ending March 31. The impact of 'right-sizing' the cost base towards a more digital model is reflected in strong profit growth.
Brait's Net Asset Value (NAV) per share as of March 31, 2026, was R 3.27, which is 7% higher than the previous year. Strong operational performance continued at Virgin Active, with EBITDA growing by 37% to £110 million. Nelson noted that the growth forecast from new fitness centers and the refurbishment program positions the business for an exit within the next two years.