Results have recently been released of the share offer of insurance company Alliance Assurances (www.allianceassurances.com) on the Algiers Stock Exchange (www.sgbv.dz). The share offer was open from 2 November until 1 December and was oversubscribed, with private individuals flocking to receive the shares. Alliance aims to be the first private company to list on the Bourse d’Alger. It was one of the last IPOs or public offerings of shares on the African stock exchanges in 2010.
According to the official announcement from the Bourse d’Alger total of 1,804,511 shares were subscribed, the full amount offered, at a price of 830 Algerian dinars (USD11.17) each.
IPO Offer allocation
The offer was allocated as follows:
Section A: 33.3% (600,000 shares) for individuals with Algerian nationality: received 1,338,346 shares of 74.17% of the total. There were a total of 5,374 applications of which 5,284 each applied for less than 3,591 each and were allocated in full, while the remaining 90 applicants got 3,591 or 3,592 shares each.
Section B: 28.5% (514,286 shares) for institutional investors: received 181,625 shares or 10.07%. There were 4 applicants of which 3 each applied for less than 60,240 and were allocated in full and one applied for more and received 60,240 shares.
Section C: 28.5% (514,285 shares) for Algerian companies: received 186,022 shares or 10.31%, all who applied were allocated.
Section C2: Subscription Right, allocated 90,226 shares, received 100% of the allocation, all who applied were allocated.
Section D: 2.37% (42,857 shares) for insurance brokers and were allocated 3,635 shares (0.2%), all who applied were allocated.
Section E: 2.37% (42,857 shares) for the company’s employees across the 35 Algerian provinces, of which 4,657 shares were subscribed, 0.26%, all who applied were allocated.
The financial adviser for the offering is Nomad Capital (www.nomadcapital.com – website still says “under construction”), with PriceWaterhouseCoopers and Hadj Ali.
According to a previous report, General Manager Hacen Khelifati said that the company would also sell 30% to an unnamed European company in a separate transaction, which awaits regulators’ approval. He was also reported as saying that the company would benefit from government incentives to encourage listing including a 5-year tax holiday on profits from the operation in order to raise new capital for development and to help revitalise the Algiers Bourse.
Alliance plans to use the capital to meet new regulatory requirements and to set up 2 new subsidiaries:
• A real estate asset manager to maximize value for Alliance and third-party investors;
• A venture capital vehicle dedicated to investments in sectors related to the insurance field.
Alliance Assurances already has two subsidiaries: ATA, and a dedicated IT engineering subsidiary named ORAFINA.
Alliance Insurances is a joint-stock company created in July 2005 and says it is now a multiline insurance company with more than 300,000 insured clients and total net premiums in 2009 of 2.8 billion Algerian Dinars with a net profit of 312 million Algerian Dinars, providing a 39% return on equity, according to a press release.
About the Bourse d’Alger
The Société de la Gestion de la Bourse des Valeurs Mobilières was set up in 1997 under a 1993 law and started trading in 1999. The bourse website says the listed equities are Egh el Aurassi (state-owned hotel) and Saidal (state-owned pharmaceutical company) while the listed debt securities are Algerie Telecom, Spa DAHLI and Sonelgaz securities. Trading takes place twice a week, on Monday and Wednesday mornings for two hours.
