MTC rings up Namibia’s biggest IPO, coming this month

IPO ALERT – Namibia is gearing up for its biggest initial public offering (IPO) when Government sells 49% of the leading telecommunications company MTC Namibia. The IPO prospectus is set to be published on 20 September and the share offer will open the same day and is likely to close at 12 noon local time on 1 November. The aim is to complete the listing on the Namibian Stock Exchange (NSX) before the end of November 2021.

Government has budgeted to raise N$1.5bn from the listing ($90m) but the number could be much higher.

The share offer will be open for domestic and international investors. Namibia Post and Telecommunications Holdings Limited (NPTH), which is a 100% state-owned enterprise (SOE), will retain 51% of the shares. The listing prospectus was registered by Namibia’s Registrar of Companies on 19 August.

According to MTC’s annual report for the year to September 2020, revenues were N$2.68bn (USD $160.7m), up 2.7% on the previous year, and earnings before interest, tax, depreciation and amortization (EBITDA) of N$1.4bn were up 3.8% “despite listing costs and the impact of (International Financial Reporting Standard) IFRS 16”.

However net profit after tax (NPAT) was down 3.8% to N$772m ($46.2m) “due to higher depreciation due to capital expenditure over the past three years”. Revenues were up due to “2% growth in active customer numbers and 22% growth in data revenue” including because of working from home. Blended average revenue per user (ARPU), excluding handset revenue, was N$87.50 ($5.24).

Nearly N$1bn in dividends

MTC paid dividends of N$977.8m for the year, including a special dividend of N$400m in December 2019. The rest of the dividend, at N$577.8m, is up strongly from N$413m (2019) and N$374m (2018).

MTC has 91% share of the Namibian market with 2.58m (up by 2.1%) subscribers. Mobile network covers 97% of the population in the large country, with 100% planned by 2023, and mobile broadband covers 87%. MTC was first established by Swedfund and Telia with NPTH and in 2004 they sold their shareholdings to NPTH. Portugal Telecom invested in 2006 and sold the shares back to NPTH after 2016.

“We take great pleasure to invite you to share in the prosperity by subscribing for shares in this truly Namibian company. The listing will provide an opportunity for all MTC customers, staff, stakeholders, and the public in general, to acquire MTC shares and participate in the ownership of MTC,” said the MTC statement.

How to invest

If the public offer is oversubscribed the order of the allocation process will be first to previously disadvantaged Namibians, then to MTC staff and customers, followed by Namibian natural persons and corporates, and finally to Namibian institutions and SADC and international investors.

Shareholding applications for the general public will be made available online on the MTC website from 20 September 2021 at 9:00, or by collecting a prospectus, and completing and submitting an application form at any mobile home, selected Nampost outlets or a stockbroker.

According to news reports, the Government Institutions Pension Fund (GIPF) will be allotted 20% stake and MTC’s 670 staff are expected to be allocated shares under an employee benefit scheme.

The listing was initially due in in March 2020 but was delayed due to the COVID-19 pandemic and in order to achieve good value for the Government owner. MTC appointed IJG Securities and PSG Wealth Management (Namibia) as Sponsoring Brokers.

Comment – Many people have called on African governments to sell parts of their SOEs and list them on the stock exchange, to give more avenues for domestic savings and to deepen capital markets while raising funds to cut debt or spend on infrastructure. CONGRATULATIONS TO THE NAMIBIAN GOVERNMENT, THE NSX AND ALL AT MTC NAMIBIA ON ACHIEVING THIS MILESTONE!

Eco-friendly shopping centre raises $18m green bond

Cosmos Youpougon shopping centre in Abidjan won International Finance Corporation’s Excellence in Design for Greater Efficiencies (IFC EDGE) certification for Green Buildings.

The first corporate green bond in francophone West Africa was oversubscribed and CFA 10bn ($18.1m) was issued on 12 August in 8-year notes at a yield of 7.5%, 150 basis points less than the previous bank finance. The bond was issued Emergence Plaza, owner of retail complex Cosmos Yopougon, in Abidjan’s Youpougon municipality. The market welcome could spur further green bond issuance.

According to a press release, Africa so far accounts for less than 1% of more than $300bn of green bonds issued annually. Of the total $3.96bn of green debt issued to date in Africa, just $64mn was issued by non-financial companies prior to the Cosmos Yopougon deal, according to data compiled by the Climate Bonds Initiative. The previous 2 corporate green bonds were Acorn Holdings in Kenya and North South Power Company in Nigeria.

The $30m shopping centre, built on a 3 hectare site, opened in 2018 and in 2020 it was the first operational building in Francophone West and Central Africa to be awarded the Excellence in Design for Greater Efficiencies (EDGE) green building certificate by the World Bank Group’s International Finance Corporation—an initiative to encourage developers to design their buildings with resource efficiency in mind. EDGE’s monitoring software helps building managers reduce water and power consumption. Cosmos Yopougon cut its carbon emissions by 44% last year by using the EDGE system to optimise its energy use. 

There are 60 tenants, including Carrefour, Burger King, Orange, MTN, Majestic Cinema, HA, Zino and Decathlon.

Cheick Sanankoua, co-Founder and Managing Partner of HC Capital Properties, which developed, financed, and manages Cosmos Yopougon, says: “Our experience shows that you can integrate climate initiatives, be cost efficient and ultimately deliver attractive returns for investors; it doesn’t necessarily cost more to be green. This has helped put green financing on the map in the region—if you build green you can get access to competitive financing, which is a language people understand. Hopefully that gets more people to start thinking about alternative ways to improve their projects by making them ecologically sound.”

Cosmos Yopougon’s ethos also focuses on social sustainability. The shopping mall is targeted at low-to-middle income consumers and, according to the press release, it is the most visited shopping centre in the region, with a record 397,360 monthly footfall in May 2021 and a very high occupancy rate of 93%. HC Capital Properties plans to issue further green bonds to finance the development of more retail complexes in Francophone West & Central Africa.

Local placement agent Hudson & CIE structured and arranged the bond sale, while French law firm Gide was the legal advisor on the deal. SFO Capital Partners, the lead global investor in the project, a London-based global real estate investment management firm following a hands-on approach to investing with a focus on entrepreneurial agility.

Kadi Fadika-Coulibaly, Managing Partner of Hudson & CIE, comments: “The development of this market is especially important in light of the UN’s recent climate change report, which underscores the need for issuers and investors to increase their focus on sustainability issues. At the same time, we also recognise the potential for green bonds to support more environmentally friendly real estate investment and development, so we believe this bond will pave the way for more issuance on that front as well.”

According to an article on Bloomberg, Hudson & Cie is advising on up to CFA 30bn of green debt, including financing for projects in Côte d’Ivoire. The sale in January 2021 of EUR 750m ($876m) of debt for the funding of green and social projects was oversubscribed almost 6x, Jean François Brou, CEO of Société Ouest Africaine de Gestion d’Actifs, told Bloomberg.

AELP Link order platform to boost trading between African exchanges

Dr Felix Edoh Kossi Amenounvé, President of ASEA and CEO of the BRVM, and Dr Walid Al Ballaa, Managing Director of DirectFN in Abidjan

The African Securities Exchanges Association (ASEA) has signed a contract on 30 July to procure an order-routing system to link stockbrokers on seven of Africa’s leading securities Exchanges. The contract is for the design and rollout of the AELP Link technology platform for routing orders and trade confirmations between stockbrokers on the seven bourses.

The Supplier is DirectFN, a global IT firm experienced in capital markets solutions across the Middle East and many emerging and frontier markets, which was awarded the contract after a competitive bidding process that attracted applications from top international suppliers in 18 countries.

The seven exchanges are working together in the African Exchanges Linkage Project (AELP) to boost pan-African investment flows and bring more liquidity to African markets. This is a joint initiative by ASEA and the African Development Bank (AfDB) aimed at unlocking Pan-African investment flows, promoting innovations that support diversification for investors, and addressing depth and liquidity in the markets. It is funded by a grant from the Korea-Africa Economic Cooperation (KOAFEC) Trust Fund managed by the African Development Bank.

Investor orders in one market will be channelled by a domestic stockbroker through the AELP Link to a stockbroker on the foreign market where the security is listed, to enter into that market for execution in the foreign market. African Listed Securities to be accessed through the AELP Link include all securities that are available for cross-border investors.

Equity investments available include Africa’s most promising and profitable businesses as well as some global leaders among more than 1,050 companies listed. Investors will also buy or sell corporate and government bonds, exchange-traded funds (ETFs) and derivatives where these are listed on the participating Exchanges and the sponsoring stockbroker provides access.

The AELP exchanges are: Casablanca Stock Exchange, The Egyptian Exchange, Johannesburg Stock Exchange, Nairobi Securities Exchange, Nigerian Exchange, Stock Exchange of Mauritius and Bourse Régionale des Valeurs Mobilières (BRVM), the regional stock exchange for the West African Economic and Monetary Union’s eight West African countries.

Dr Felix Edoh Kossi Amenounvé, President of ASEA and CEO of the BRVM, said: “We are excited with this big step towards free movement of investments across Africa and free flow of capital. Our aim is to open new opportunities for individual and institutional investors to invest productively into Africa’s growth story. The Exchanges continue to support African enterprises and governments to raise long-term capital for African jobs, business growth, infrastructure and development.”

Dr Walid Al Ballaa, the Managing Director, of DirectFN, said: “With innovative technology and focus to bring digital maturity in building digital relationships through the AELP-Link technology platform establishment, DirectFN feels equally excited to assist practically in realizing the goals across the participating African Exchanges and to enable the African capital market ecosystem digitally to create positive impact on the overall economy.”

The African Securities Exchanges Association is the Premier Association of securities exchanges in Africa who have come together with the aim of developing Member Exchanges and providing a platform for networking. ASEA was established in 1993 and works closely with its Members to unlock the potential of the African Capital Markets.

DirectFN describes itself as an innovative financial technology provider company, founded on game-changing innovation and passionate about creating new value for the capital market ecosystem. For over 20 years it has consistently specialized in bringing digital maturity with FinTech (software applications platforms) and FinCON (market-information screens) solutions to brokerage houses, banks, clearing members and asset-management companies from Morocco to Indonesia. It has five corporate offices in UAE, Saudi Arabia, Kuwait, Sri Lanka, and Pakistan and is expanding in emerging and frontier markets.

LEI global identity to boost trade for African SMEs

Photo: by Copperwares Zimbabwe

The global initiative to give business entities worldwide a Legal Entity Identifier (LEI) is to roll out for African small and medium enterprises through innovative collaboration including the London Stock Exchange and a Zimbabwean bank.

The LEI provides globally recognized business identities to SMEs. In innovative partnership Zimbabwe’s NMB Bank will act as the first Validation Agent in Africa, using the bank’s usual onboarding process for business clients, including  “know your client” (KYC) and “anti money laundering” (AML) checks, to very businesses identities and ownership information. This should help SMEs access more favourable trade terms on international transactions and improve their access to finance.

Second Muguyo, Finance and Admin Manager at Copperwares, a Zimbabwean copper and silver giftware manufacturer is quoted in a story on Mondovisione website: “We face trade financing challenges not only because we are a small company, but because we are unknown from Zimbabwe. While we are not directly excluded from trade finance, we often receive unfavourable repayment terms which result in indirect exclusion. The LEI, as a globally recognized form of business ID, will give us greater credibility when we apply for finance, engage in international trade and establish new supplier relationships for our manufacturing process.”

Partners in the LEI initiative are:

The aim of supplying LEIs to African SMEs is to boost financial inclusion by helping them apply for trade finance and establish contractual, regulated agreements with banks, payment networks and trading partners. This should mean broader access to financial services and greater participation in both domestic and international markets as well as increasing the flow of inbound capital to fuel Africa’s economic development.

Stephan Wolf, CEO of GLEIF is quoted: “The LEI has the potential to create a more transparent, efficient cross-border exchange of goods and data under the African Continental Free Trade Area. This is the first step toward greater financial inclusion and overcoming the challenges associated with access to trade finance in Africa. Considering the high pace of digitization and regulatory development across the African continent, the LEI is a great natural fit. It is a compelling, ready-to-go cross-border solution for entity identification that is open, reliable and easily integrated into regulatory frameworks.”

GLEIF is keen to hear from governments, non-governmental organizations, banks and other stakeholders interested in expanding the LEI initiative in Africa or replicating the model in other developing economies. Email info@gleif.org for more information.

Alberta Abbey, LEI Analyst, Data & Analytics, LSEG: “LSEG joined this initiative to facilitate wider LEI adoption across Africa. By demonstrating the uses and benefits of Legal Entity Identifiers, our aim is that this project will encourage more entities across Africa to obtain LEIs. We started the project with a partnership approach, which we intend to continue beyond the pilot.”

Barry Cooper, Technical Director, Cenfri: “The LEI is one of the few initiatives with real potential to meaningfully address the challenges of de-risking in developing markets. The high costs of institutional due diligence and information asymmetries is a core element of the exclusion of small and medium enterprises, and even some corporates, from regional and international markets. A robust global enterprise identity opens up an under-represented large base of SMEs and women-owned businesses to trade across Africa as well as across the global markets. Cenfri looks forward to the deepening of LEI usage across Africa and the inclusion of SME and women-owned enterprises in the global economy.”

Photo: by Copperwares Zimbabwe

Read more:

  1. Making Finance Work for Africa: “Promoting the Legal Entity Identifier to foster transparency and trade in African markets” (article by Hugues Kamewe Tsafack and Sarah Weiss, 17 Jan 2021)
  2. Validation Agent Framework – a new operational model in the Global LEI System, which allows financial institutions to obtain and maintain LEIs for their clients in cooperation with accredited LEI issuer organizations.

RisCura’s Bright Africa 2020 – private equity in tough times

Deal activity in African private equity is growing, although fundraising has been erratic, according to Bright Africa 2020, a research initiative by global investment firm, RisCura. The private equity section of their report can be found here.

Gilbert Anyetei, principal researcher and senior associate for alternative investment services at RisCura, says the report “highlights the current state of the private equity market in Africa and trends in prices paid for private equity assets over time,”

Fund-raising

Private equity fundraising activity across Africa had been showing strong growth. The total value of 2019 private equity fundraising reached $3.8bn, up from $2.7bn in 2018, and the second-highest year of fundraising since 2010. Then came the significant contraction of 2020.

Deal activity

Anyetei says that total private equity deal activity has steadily increased over the last 2 years as fund managers continued to deploy the significant amount of capital raised in the market during earlier fundraising years. Historically South Africa has made up a large proportion of private equity transaction activity, but its contribution was 26% as at June 2020, after being fairly constant at around 27% over the last 3 years (despite South Africa’s limited growth prospects and increasing risk profile) but down significantly from 49% as at June 2010. 

Deal activity in Nigeria, Africa’s largest economy in Africa, increased moderately by 13% for the period ended June 2020, compared to the 50% increase experienced for the period ended June 2019. Kenya dominates East Africa’s private equity investment landscape because of its large and diversified economy, pro-business government policies, and relatively low dependence on extractive commodities.

Pricing

For the last 2 years, private equity median EV/EBITDA multiples have exceeded those of listed companies. Anyetei comments: “Although this appears counter-intuitive because of the liquidity discount that should apply to prices in the private markets, the lack of liquidity in many African listed markets, the high cost of compliance, and the resultant lack of capital available to these markets complicate a direct comparison.”

Median private equity EV/EBITDA multiples across Africa (excluding South Africa) have steadily increased since June 2012. Meanwhile the multiples of listed equity across Africa (excluding SA) have trended downwards since the end of 2014. Anyetei says it is hard to understand the increasing multiples: “Growth prospects are currently muted when compared to earlier in the decade, and although there has been some decrease in risk in specific countries over this period, it does not appear to have driven the price increase.

“It appears that the significant amount of committed capital has had a stabilising effect on pricing, which is likely to survive short-term changes in funding levels and risk profile. However, the committed capital model can only delay the efficiency of markets, and prolonged decreases in fundraising and risk outlook are likely to filter through to pricing eventually.”

The sharp decrease in the fundraising experienced because of the pandemic and resultant economic slowdown is expected to continue for at least 18 months. If these trends do continue, prices may prove to be less buoyant going forward, warns RisCura. The Bright Africa 2020 report is on this website.

Ethiopia’s draft capital markets bill

One of Africa’s biggest economies is taking a step closer to establishing a capital market to allocate capital more efficiently. The National Bank of Ethiopia (NBE), the central bank, has published a draft Capital Markets Establishment Proclamation for consultation.

According to a news report in Fortune newspaper, a technical committee consisting of people from the central bank, the Ministry of Finance, the Office of the Attorney General and external advisors, has been working on the for the past year. The bill is expected to be turned into law before the end of 2020.

Setting up a Capital Market Authority regulator is a key part of the draft bill. The proposed CMA will have a wide mandate, including promoting the development of capital markets by removing impediments and creating incentives.

It will also have the usual regulatory functions of ensuring a system for orderly, fair, efficient and transparent issuance and trading in securities, protecting investors and reducing systemic risk. The market will feature equities, bonds and financial derivatives.

Ethiopian Securities Exchange

The Authority will decide when to give a licence for establishing an Ethiopian Securities Exchange to provide the trading platform. It may even allow more than one exchange in future. The Exchange will provide a trading platform for equities, debt securities, derivative instruments, units in a collective investment scheme, real estate investment trusts (REITs), currency exchange contracts and other products to be declared by the Authority’s directive.

Government will be a minority shareholder in the Ethiopian Securities Exchange with a target of 5%-25% of the shareholding. Corporations, capital market intermediaries and international securities exchange operators are expected to hold 25%-55% and individuals 20%-40% of the shares. The aim is that foreign investors should not own over 25% of the shares. However, if no-one wants to invest in owning a stock exchange, then Government could own 100%.

Other work for the CMA includes creating regulations to govern the listing and delisting of financial products. It will grant licences to securities brokers, securities dealers, investment advisers, fund managers, investment banks and collective investment schemes.

One news report quoted a source: “The idea is to make the market predominantly owned by the private sector and the Government to be a strategic partner and market maker in the process. It’s likely that the market will kick off with stocks and bonds. The other financial market products are listed in order to give breathing space for a legal framework to be in place to be used at a later time.”

Information about the planning and timetabling has been scarce. We have previously reported the excitement at a finance summit in December 2018 when Zemedeneh Negatu, Global Chairman of Fairfax Africa Fund, said as many as 50 to 70 companies were ready for listing. Ethiopian banks and insurance companies are already well regulated with high standards of disclosure and many have large numbers of shareholders.

History of stock exchange in Ethiopia

Ethiopia saw its first initial public offering (IPO) of shares in 1959. To get the market more organized and efficient, the Share Exchange Department at the former State Bank of Ethiopia ran a successful stock market from 1960. This included capital raising through issuing shares and secondary trading in shares. However, the exchange was closed after the military overthrew the Government in 1974.

Democracy was restored after 1991 and a group of private-sector leaders worked together on preparations. By 2000 they were ready to launch the Addis Ababa Securities Exchange, but Government said other priorities needed to be tackled first.

Prime Minister Abiy Ahmed took office in 2018 and announced plans for economic reforms including a regulated capital market and stock exchange to support capital raising, growth and jobs.

Who will the new regulator be accountable to?

According to the draft law, the new regulator will be accountable to Parliament and the seven-strong Board will include the Minister of Finance, the Governor of the Central Bank and the Attorney General, or their representatives, and three other stakeholders appointed by Parliament on recommendation from the Prime Minister, with the Prime Minister appointing the Chairman from among members. Parliament will also appoint the CEO and deputy CEO on recommendation from the Prime Minister.

According to news agency Bloomberg: “Ethiopia is among the biggest 5economies in sub-Saharan Africa and the second-largest by population, but doesn’t have a stock market. Since Prime Minister Abiy Ahmed came to power in 2018, the country has pursued economic reforms, including opening up formerly closed-off sectors such as telecommunications.”

3 East African exchanges to link before year-end 2020

Market integration across 3 East African securities exchanges is moving fast with a target of being live and online by 31 December 2020. According to a news report, Uganda Securities Exchange, Dar es Salaam Stock Exchange and Rwanda Stock Exchange are set to start trading as a single market after connecting their trading systems to each other and hooking to the EAC Capital Markets Infrastructure (CMI) Information Technology platform.

The Pakistan-based InfoTech Group is been contracted to provide the software connecting the trading platforms of the U to enable them to run as a single market in real time. A news release from 2018 says ” InfoTech was selected to deploy its Capital Market suite, Capizar ATS, along with a Smart Order Routing system. This would achieve a single market for both central banks and capital markets and will stimulate intra-regional securities trade and investment.”

According to the report in East African “They can operate as a single market with a view of reducing the cost and time of trading in shares of companies listed on markets across the borders. Investors in the 3 countries will buy and sell shares of companies listed in any of the countries without going through different stockbrokers.”

 

World Bank project

The World Bank has committed $26.18 million for a 9-year Financial Sector Development and Regionalisation Project (EAC-FSRDP) 1. It supports financial sector integration among the East African Community (EAC) member States and was planned to as part of preparations for bringing in a single currency across the EAC, although the 2024 deadline for this is now being reviewed.

The World Bank project finishes on 31 December after the EAC Secretariat requested a 6-month extension for activities whose implementation was disrupted by Covid-19 pandemic. According to the World Bank website, $16m was the initial commitment, topped up with $10.5m in September 2016, and $24.7m has been disbursed as of September 2020.

The World Bank project has 6 components:

  1. Financial inclusion and strengthening of market participants ($4.3m)
  2. Harmonization of financial laws and regulations ($4.23m)
  3. Mutual recognition of supervisory agencies ($0.7m)
  4. Integration of market infrastructure ($3.75m)
  5. Development of regional bond market institution building ($12.1m)
  6. Project Management ($1.1m).

Missing Nairobi Securities Exchange

According to the report, the region’s biggest exchange, the Nairobi Securities Exchange, pulled out of the project in 2015 after expressing dissatisfaction on how the Pakistan firm was awarded the contracting citing procurement irregularities.

Geoffrey Odundo, chief executive of the NSE, was quoted: “We have not yet reconsidered our position in terms of our participation in this project but we have had a discussion with EASEA in terms of the progress of the project and how far they are. They mentioned to us that they have set the infrastructure and they are ready to go.

“They are supposed to share with us some information including the efficiency and the expected outcomes of the project for us to be able to make a proper assessment of the current status of the project before we can make any further decisions. But right now we have not made any decision to go back to the project.

According to the news report, the market capitalization of the NSE was $22.1 billion in June compared with $6.5bn on DSE, $5.1bn on USE and $3.5bn for RSE.

Ready in September

Celestin Rwabukumba, the chairman of The East Africa Securities Exchange Association (EASEA) and CEO of Rwanda Stock Exchange CEO is quoted by The EastAfrican reporter James Anyanzwa: “We are doing the final testing on our system for the CMI project. We are ready psychologically and technically we are working on those technicalities that are remaining. On the other hand Tanzania and Uganda are technically ready,”

“Everything should be ready by the end of this month and then we agree on the time of the launch because 95% of the work has been done. The launch cannot go beyond December because we cannot afford to go beyond that time.”

The report said the project has taken more than 5 years due to a payment dispute with the software provider and lack of integration between CMI software and the trading systems of the participating Uganda Securities Exchange, Dar Es Salaam Stock Exchange and Rwanda Stock Exchange.

AELP is different

The EAC market integration is separate from the African Exchanges Linkage Project, a joint initiative of the African Securities Exchanges Association (ASEA) and the African Development Bank (AfDB). The initial phase is promoting cross-border trading and liquidity in 7 stock markets with a combined market capitalisation of $1.0 trillion.

These exchanges are: Bourse Régionale des Valeurs Mobilières (BRVM – Benin, Burkina Faso, Côte d’Ivoire, Guinea Bissau, Mali, Niger, Senegal and Togo), Casablanca Stock Exchange (Morocco), The Egyptian Exchange (Egypt), Johannesburg Stock Exchange (South Africa), Nairobi Securities Exchange (Kenya), the Nigerian Stock Exchange (Nigeria) and Stock Exchange of Mauritius (Mauritius).

In March 2019, ASEA received a grant of $980,000 from the Korea-Africa Economic Cooperation (KOAFEC) trust fund via AfDB to facilitate implementation of the project.

CIMERWA cement is Rwanda’s 10th listing

CIMERWA, the only integrated cement producer in Rwanda, is also helping build the capital market by providing the tenth listing on the Rwanda Stock Exchange. It listed by introduction on 3 August, without a public share offer, however, the shareholders of 49% of its 703.2m shares will make them available for buying by the public to form a “free float”.

The shares are offered at RWF120 (12.67 US cents) each, according to an article on Rwanda’s KT Press website, giving a total value (market capitalization) of RWF84.4bn ($87.3m). The shares offered for buyers and traders are owned by:

  • AGDF Corporate Trust on behalf of the Government of Rwanda (16% of the total)
  • Rwanda Social Security Board (RSSB – 20%)
  • Rwanda Investment Group (RIG – 11%)
  • Sonarwa Holdings Ltd.

CIMERWA is also creating an employee stock ownership plan (ESOP).

CIMERWA is 51% owned by South Africa’s Pretoria Portland Cement. It has a production plant in Bugarama, in south-western Rwanda, with capacity to produce 600,000 tonnes per year but currently producing at up to 80% of capacity (480,000 tonnes). Prospects are good as Government of Rwanda steps up construction, including plans by the Ministry of Education to build 22,500 school classrooms by September, in a programme partly financed by the World Bank.

in the year to September 2019 it had revenues of $64.4m and net income of $3.5m, according to the prospectus. It has enjoyed revenue growth of 40% a year and has been profitable since 2016 with 31% EBITDA margin (a measure of cash generated by operations compared to turnover) and 64% gross profit growth.

Albert Sigei, CIMERWA CEO  since May, said: “We have been part and parcel of Rwanda’s growth story with contribution to the society on many fronts. This will be an opportunity for investors to gain exposure into the attractive cement industry with solid growth potential.”

CIMERWA was established in 1984 as Ciments dur Rwanda as a government parastatal in a cooperation project with China. It was privatized in 2007 with RSSB taking 37%, Government 30% and RIG 21% and other investors the rest. In April 2020 it became a private company and PPC International Holdings had 51%.

CIMERWA chairman Regis Rugemanshuro added: “This transaction will create opportunities for the private investors, and the government will become a neutral player in a sector whose potential is yet to be fully exploited. There could not be a better avenue of achieving this objective than listing at the RSE. With Rwanda having about 57kg per capita cement consumption annually, we have just but only scratched the surface on the huge long-term potential in the cement industry.”

Clare Akamanzi, chief executive of Rwanda Development Board, said: “If you look at Rwanda’s economic recovery plan, we expect CIMERWA to play a big role both in terms of building the economy through the indirect contribution but also directly contributing to the rebuilding and reconstruction of our economy post Covid-19.”

Demand for cement is estimated at 700,000 tonnes a year and there is considerable urbanisation as well as other big government projects such as Bugesera International Airport, model villages and transport projects. Although Rwanda’s economy is only expected to grow by 2% in 2020, due to the health pandemic, stronger growth of 6.3% is forecast for 2021 and 8% for 2022.

It is the fifth local company on the Rwanda bourse. South African health investor RH Bophelo was the ninth listing on 1 June.

However, trading in shares on the exchange for the first six months of 2020 was just under $400,000, down 85% compared to $2.6m in the six months to June 2019, according to an article in Rwanda’s New Times, particularly as trading slowed dramatically once the health crisis hit in March. Trading in bonds more than doubled, from $6.2m to $12.7m.

Top banks and bankers – African Banker Awards winners 2020

It is an honour to be a judge for this competition and tough to choose among so many excellent entries!

London, 26th August 2020: Winners of the 2020 edition of the African Banker Awards were announced today at a virtual Awards ceremony. The awards were pushed back to August to coincide with the African Development Annual Meetings which are taking place this week, with the election of the new President of the bank expected tomorrow 27 August.

The Awards are considered the Oscars of the African banking community and given the impartial selection and judging process are the most respected in the field.

The big winners this year were Nigerian-based group Access Bank and also women in the banking and finance sector. Following on from what was seen as a lack of inclusion last year, the organisers put an emphasis to reward institutions that ensured that women and financial inclusion at the forefront of their agenda.

Access Bank’s Group CEO, Herbert Wigwe, won this year’s African Banker of the Year. Access ranks as one of Africa’s top-tier banks and Wigwe has been at the helm of the bank’s growth and expansion, including the oversight of the takeover of Diamond Bank, a bank that was much bigger than Access Bank less than 15 years ago. Access Bank also won Agriculture deal of the year, in their role to help Olam develop their rice operations in Nigeria.

Women were also the big winners at this year’s awards. The Central Bank Governor of the Year went to Caroline Abel, from the Seychelles and the Finance Minister of the Year went to Nigeria’s Zainab Ahmed. The organisers had noted that despite difficult circumstances Ms Ahmed had managed to push through a set of difficult reforms as well as successfully engaging international partners to help the country navigate an extremely challenging economic environment.

African Banker Icon was given to Vivien Shobo, who was the CEO of ratings and advisory firm, Agusto & Co up until last December. She was recognised for playing an instrumental role in developing Nigeria’s credit markets and also for helping grow a truly world class organisation that is competing against much better resourced international players.

Tunisian pioneer Ahmed Abdelkefi won the Lifetime Achievement Award. This businessman and financier was the founder of numerous businesses operating in leasing, brokerage and investment banking. He also founded private equity group Tuninvest, and then launching Africinvest, without doubt one of Africa’s most successful Africa-owned PE firms.

The split of the other winners was quite even. TDB won Bank of the Year. Incidentally, its CEO, Admassu Tadesse, won Banker of the Year at last year’s ceremony. The organisers added a number of awards this year to reflect the AfDB’s High Fives Agenda. The energy deal of the year went to a renewable energy bond structured by Nedbank, and infrastructure deal of the year went to the Port of Maputo in a transaction led by Standard Bank. The SME bank of the year went to Nigeria’s Bank of Industry.

Commenting on this year’s awards, Omar Ben Yedder, Publisher of African Banker said: “It’s been a momentous year in every sense. Banks will have to play a lead role in kick-starting post-Covid growth and sustaining the real economy. Governments and regulators have done an excellent job with limited means and both our winners Caroline Abel and Zainab Ahmed have demonstrated strong leadership there. Banks will need to work with institutions and partners to ensure liquidity doesn’t dry up. To quote our Lifetime Achievement Winner: Keep moving forward: adapt, innovate, take risks. That’s your job. Today’s crisis is neither the first and it will not be the last.”

The Awards took virtually on the sidelines of the African Development Bank Annual Meetings which are now officially open.

The awards, which are held under the high patronage of the African Development Bank, are sponsored by the African Guarantee Fund as Platinum Sponsor, the Bank of Industry as Gold Sponsor and Moza Banco as Associate Sponsor.

THE 2020 AFRICAN BANKER AWARD WINNERS

African Banker of the Year
Herbert Wigwe, Access Bank

Lifetime Achievement Award
Ahmed Abdelkefi, Founder Tunisie Leasing; Tuninvest; Tunisie Valeurs

African Banker Icon
Vivien Shobo, Former CEO Agusto & Co.

African Bank of the Year
Trade and Development Bank (TDB)

Minister of Finance of the Year 
Ms Zainab Ahmed, Minister of Finance of Nigeria

Central Bank Governor of the Year 
Caroline Abel, Central Bank Governor of Seychelles 

Investment Bank of the Year
Citi

Award for Financial Inclusion 
Kenya Women Microfinance

SME Bank of the Year
Bank of Industry, Nigeria

Socially Responsible Bank of the Year
Equity Bank, Kenya

Innovation in Banking
Ecobank

Deal of the Year – Equity
MTN Nigeria IPO – Chapel Hill Denham

Deal of the Year – Debt
Bank of Industry €1bn syndicated senior loan facility – Bank of Industry / Afreximbank / Credit Suisse

Infrastructure Deal of the Year 
Port of Maputo – Standard Bank

Energy Project of the Year
Renewable Energy Bond – Nedbank

Agri Deal of the Year
Olam Rice Farm – Access Bank

Regional Bank of the Year
East Africa – Equity Bank
West Africa – Coris
North Africa – CIB, Egypt
Southern Africa – Moza Banco
Central Africa – BGFI, Gabon

For more on the African Banker Awards, please visit: www.africanbankerawards.com .

Africa’s top telco towers firm seeks $7bn US listing

A telecoms firm launched in Lagos is set to be Africa’s biggest listing in the United States with a suggested $7bn valuation. IHS Holding Ltd, which operates up to 28,000 wireless telcoms towers across nine countries, announced plans to go ahead with a potential initial public offering (IPO) of shares to investors in a press release on 14 August. It said the listing would start after a review by the US Securities and Exchange Commission (SEC), but gave no more details.

It is Africa’s largest mobile infrastructure provider and third largest independent multinational tower company in the world. It could be seeking to raise up to $1bn in New York.

In February, before the COVID-19 crisis hit markets, news agency Bloomberg gave the estimated valuation for IHS, which is based in Mauritius, and reported it had hired Citigroup Inc and JP Morgan Chase & Co as global coordinators for a listing. The preference was for New York as other world-leading telco tower firms are also listed in the US and have higher valuations compared to those in London. In 2018 the firm had delayed plans for a listing until after Nigeria’s Presidential election as Nigeria is still its main market.

Group CEO is US entrepreneur Sam Darwish, originally from Lebanon, was working in Nigeria with the first mobile (GSM) operator there. He founded IHS in 2001, with IHS Chief Operating Officer William Saad when the Government announced plans to privatize telecoms. The group builds or buys towers and leases space to mobile network operators (MNOs) who in turn provide wireless voice or data to customers, and it manages sites for MNOs. It is active in Nigeria, Cameroon, Côte d’Ivoire, Zambia and Rwanda with some 24,000 towers.

Earlier in 2020, IHS finalized the acquisition of some 1,600 telecom towers in Kuwait from Zain and of Brazil’s Cell Site Solutions (Cessão De Infraestruturas S.A., CSS) which has some 2,300 towers and telecom infrastructure sites in Brazil, Peru and Colombia.

Shareholders include the French private equity investor Wendel Group, which has a 21.3% stake, Goldman Sachs, MTN Group Ltd, previously reported with a 29% stake, and many other leading investors including International Finance Corporation and Emerging Capital Partners. Wendel is a listed long-term capital investor in a group launched by Jean-Martin de Wendel in 1704.

As it expanded, IHS has raised $5.5bn in equity from its shareholders and debt over the years, including $1.3bn in debt in 2019.