(Bloomberg) — Discovery Ltd., owner of South Africa’s largest medical-insurance administrator, said it will sell shares to fund expansion in the U.K. and its home market.
Discovery, based in Johannesburg, will raise as much as 5 billion rand ($429 million) through the sale of shares at 90 rand apiece to support its U.K. business and pursue opportunities in South Africa, it said in a statement Tuesday.
“The board has resolved to raise capital to pursue distinct opportunities for additional growth,” Discovery said. “The capital of 4 billion rand to 5 billion rand will be raised by way of an underwritten renounceable rights issue, the terms of which will be finalized by March 10.”
Fiscal first-half net income climbed to 3.5 billion rand in the six months to December, from 1.71 billion rand a year earlier, with profit doubling on new business and the acquisition of a stake in a Prudential P.L.C. unit, the company also said. Normalized diluted earnings per share excluding one- time items rose 17 percent to 3.40 rand and the company declared an increased interim dividend of 85.5 cents.
Discovery operates in countries including South Africa, the U.K., the U.S., Australia and China.
In the United States, the company helped develop modern personal health account and incentive-based wellness programs through its Destiny Health unit. Discovery sold Destiny in 2008, but it later started Vitality, a wellness program business, in 2010.
Last year, it agreed to buy the 25 percent of the U.K.’s Prudential Health it doesn’t already own for 155 million pounds ($239 million). The South African insurer is targeting 1 billion pounds of earned premiums and 200 million pounds of new business from U.K. operations over the next five years.
The stock dropped as much as 6.1 percent in Johannesburg trading, the biggest intraday decline since August 2013, before paring losses to be 2.9 percent lower at 112.11 rand at 9:46 a.m.