Archive for the 'Listing' Category

Naspers gives Europe its biggest consumer tech listing

Naspers has pulled off a dramatic restructuring of its holdings to unlock value after the successful listing of Prosus on Euronext Amsterdam stock exchange and simultaneously on the Johannesburg Stock Exchange (JSE). Prosus Group is valued at EUR120 billion ($134bn) and is Europe’s biggest consumer Internet firm and the third in value on the Amsterdam bourse after Royal Dutch Shell and Unilever.

South Africa’s Naspers is Africa’s most valuable company and still owns some 73% of Prosus. It has spun off its global Internet investments into Prosus including the largest stake (31%) of China’s Tencent and the largest stake (28%) stake in Mail.Ru, a giant Russian internet company, reported to be worth $1.4bn.

According to an announcement in Amsterdam: “The Prosus Group’s businesses and investments serve more than 1.5 billion people in 89 markets, and are the market leaders in 77 of those markets. The Prosus Group’s consumer internet services span the core focus segments of classifieds, payments and fintech as well as food delivery, plus other online businesses including e-tail and travel. The Prosus Group aims to build leading companies that create value by empowering people and enriching communities.”

Other investments include Russia’s Digital Sky Technologies (which invests in Facebook, Groupon and Zygna), Indian e-commerce start-up Swiggy, Takeaway.com, Germany’s Delivery Hero, investment in Brazil and e-commerce in the Middle East through Souq.com as well as financial services firms PayU and Wibmo.

In May 2018 Naspers sold its 11% shareholding in India’s Flipkart for $1.6 billion after buying it for $616m (Walmart bought 77% of Flipkart for $16bn in its biggest acquisition as it sought to square up to Amazon and local competitors for domination of the growing Indian market.

Although Euronext Amsterdam bourse set a guide price of €58.70 per share, investor enthusiasm was high as the shares opened trading at €76 and reached a high of €77.40, up 32%, on the first day before closing the week at €73.90. News reports say the market valuation of Prosus is based mostly on the Tencent holding and does not count many of the other investments.

Unlocking value in Naspers

Naspers had made what has been described as “the best venture capital investment ever” when in 2001 it bought 46.5% of Chinese Internet tech company Tencent with an initial investment of $32 million, which had grown to $175bn in value by March 2018, according to Bloomberg. It has also made huge profits by selling some of its Tencent holdings but remained with 31.1%.

Naspers has been listed on the JSE since 1994, and its investors are predominantly South Africans including the Government Employees Pension Fund (GEPF), managed by the Public Investment Commissioners (PIC). Before the spinoff it made up 25% of the JSE’s total market capitalization, and investors had to scale back their holdings to avoid over-concentration, so that the total value of Naspers was less than that of its shares in Tencent, ignoring the other companies.

After the spinoff, Naspers share price fell nearly 30% and it became only 15% of the JSE market capitalization.

The Amsterdam listing opens the global holdings to a wider pool of investors and should permit reassessment of both the value of both Prosus shares- Naspers still owns some 73% of Prosus which has also – and allow for future capital raising. One of the biggest investors in Naspers is the South African Government Employees Pension Fund, managed by the Public Investment Commissioners.

$314m for African tech start-ups

Naspers is seeking to find similar media, e-commerce, consumer, fintech and other successes in Africa. It has appointed 48-year-old Phuthi Mahanyele-Dabengwa as CEO, its first black and first woman chief executive, according to Quartz. She was previously chief executive of Shanduka Group, an investment company founded by South Africa’s President, Cyril Ramaphosa. In October 2018 Naspers announced a $314m fund to invest into promising African tech start-ups.

History of Naspers

Naspers was set up in 1915 as De Nasionale Pers Beperkt (National Press Ltd) to promote Afrikaner nationalism and it continued to support the National Party over the decades until 1989, throughout apartheid.

The first newspaper was Die Burger in 1915 and magazine Die Huisgenoot in 1916 (both originally name De.. ). Naspers started publishing books in 1918. In 1985 it set up M-Net, the first pay-TV in southern Africa.

(Disclosure: the writer owns Naspers and Prosus shares)

Africa issuers raised $341m in 6 months, down 28%

Enterprises based in Africa raised $341 million through equity issues in the first half of 2019, down 28% on the $472m raised in the first half of 2018. Law firm Baker McKenzie has published its Cross-Border IPO Index for H1 2019, using data sourced from Refinitiv, and says this was mainly because only $85m was raised from 4 initial public offers (IPOs) on African exchanges, down 80% from $419m from 4 IPOs in the first half of 2018.

The numbers exclude mega issues by Africa-focused issuers based outside Africa. These include $750m raised on 28 June by the IPO for UK-headquartered Airtel Africa (read about the slow first day) which operates in 14 countries; and $196m raised by pan-Africa e-commerce Jumia Group (headquartered in Germany) on the New York Stock Exchange in April, see our article about the share price performance since then. Jumia sells in 13 African countries and is top e-commerce website with over 15m monthly visitors in Nigeria.

Wildu du Plessis, Head of Capital Markets at Baker McKenzie in Johannesburg, says in a press release: “The drop in African IPO values in H1 2019 was mostly because of political and economic uncertainty on the continent. Investors wanting to raise capital in Africa are thinking twice and waiting for political and economic stability to return before going ahead. Also eroding investor confidence in Africa are the escalating global trade tensions, which have culminated in, for example, the so-called United States (US) China trade wars and the possibility of a “no deal Brexit” – both have the potential to impact African economies significantly.”

Egypt buzzing

Listing bell and trading floor of the Egyptian Exchange

Baker McKenzie says Egypt is generating buzz around its pipeline of IPOs with some speculating this could be the busiest year for listings in Cairo since the uprising in 2011. Growing confidence in economic policies introduced since the currency float has boosted the Egyptian Exchange (EGX) and is prompting companies to consider share sales.

In April Khalid Abel Rahman, Assistant Minister of Finance for Capital Market Affairs, said the Government was embarking on an IPO programme is to raise EGP100bn ($5.8bn). Mohamed Farid, Chairman of the Egyptian Exchange, said that three private companies expect to launch initial public offerings (IPOs) before the end of 2019,

Baker McKenzie says a large IPO is Carbon Holdings Ltd, expected to raise $250m by selling a 30% stake and listing in London and Egypt. The company has missed the Q2 timetable mentioned by Karim Helal, Managing Director of Corporate Finance and Investor Relations, in this article last September. EFG Hermes is acting as advisor and global coordinator for the IPO, Baker & McKenzie is local legal counsel, and White & Case is international counsel.

Another large IPO is expected from Banque du Caire SAE, owned by Egypt’s second-largest state-owned bank Banque Misr. The bank has announced it will offer a 20%-30% of its shares for sale through private placement and public offering. The offer is expected to raise $300m-$400m and is forecast to happen in Q3 or Q4.

Hard work in South Africa

Du Plessis warns that governance concerns held back capital raising in South Africa: “Capital raising has decreased substantially in recent years, also due to economic and political uncertainty. Political stability will hopefully begin to return now that country’s elections are over, but there is still a lot of work to do to stabilise the economy. The World Bank recently downgraded South Africa’s growth rates and I think there is at least another year of hard work before the economy starts to recuperate and capital markets in South Africa recover,” Du Plessis says.

Life returns in Nigeria

Du Plessis adds: “There are also signs of life returning to Nigeria’s capital markets. Political instability was also to blame for a big collapse in capital raising in Nigeria in recent years, but the country looks to be recovering”. Baker McKenzie’s recent Global Transactions Forecast predicts more IPOs in Nigeria in the next 3 years. “Hopefully this is the start of a long upswing in capital raising activity in the country,” says Du Plessis.

Not specifically mentioned was the $5.1bn listing of MTN Nigeria on the Nigerian Stock Exchange (see article), which is expected to be followed by a public offering of shares soon.

By sector (details from Baker McKenzie, Enko Capital and other sources)

Energy and power: South African company Renergen Ltd, which produces natural gas and helium, in an IPO in Australia offered 12.5m shares at AUD0.80 to raise AUD10m ($7m) for its Virginia Gas Project in South Africa. Financial: Banking group Oragroup listed on the Bourse Régionale des Valeurs Mobilières (BRVM) in April after a successful IPO in Oct-Nov 2018, selling 20% of the shares to raise XOF56.92bn ($101.2m) in the largest share offer on the BRVM.
Technology: It was reported by Enko that telco Mascom could do an IPO in Botswana later this year and Econet’s Strive Masiyiwa says it will be in October and will be the biggest listing on the Botswana Stock Exchange, according to this report. Namibia’s MTC (Mobile Telecommunications Corporation) has announced plans for an IPO in Mar-June 2020.
Real estate: ICON Properties PLC’s IPO last December in Malawi raised $19.3m, and the shares were listed on the Malawi Stock Exchange in January.
Industrial: Skyway Aviation Handling Co (SAHCOL) in Nigeria launched an IPO in November 2018 but only raised NGN1.2bn ($3.4m) compared to a target of NGN1.9bn ($5.2m) despite extending the offer until January. It listed on the Nigerian Stock Exchange on 24 April.
Healthcare: Speed Medical SAE raised EGP21.5m ($1.3m), less than half its target in a domestic IPO before listing on the Egyptian Exchange in April. Consumer: Eastern Tobacco, listed on the EGX, announced in March that it had raised EGP1.7bn ($104m) through offering 4.5% of its shares in public and private offers.

Global Outlook

The Africa picture mirrors a global 37% fall in capital raised through IPOs in global markets, compared to the first 6 months of 2018. According to Baker McKenzie, a total of $69.8bn was raised across 514 IPOs, which is the lowest for value and volume since 2016. The US Federal government shutdown, continuing trade tensions between the US and Beijing, the ongoing Brexit saga and the decline of mega IPOs all contributed to a slower market performance. “With fewer IPOs in the market, competition amongst exchanges is growing, as some listing locations make strategic changes to entice public offerings. The introduction of China’s Science and Technology Innovation Board looks set to shake up the market and challenge New York and Hong Kong for tech listings. “

Koen Vanhaerents, Baker McKenzie’s Head of Global Capital Markets, says: “.. significant political issues stifled activity, along with a change in investor sentiment towards risk – particularly among pre-revenue companies.” The decline “is perhaps skewed slightly when compared to the stellar performance seen in the same period in 2018. With a strong pipeline, H2 2019 looks set to deliver a much more prosperous performance overall.”

EMEA outlook

The EMEA IPO market struggled during the first 6 months of 2019 due to uncertainties surrounding the UK’s exit from the European Union. Overall capital raised fell by 67% compared to the same period in 2018 to $9.2bn while the number of IPOs fell by 61% to 47. Cross-border activity was even more profoundly impacted with only three listings in EMEA and only one of those on the London Stock Exchange. Domestic activity levels helped the London Stock Exchange to retain the top spot for overall capital raising at $2.7bn from 12 listings. Seven of these listings were from the financials sector and raised almost $2bn, the largest of which was Network International’s $1.4bn IPO.

Second to London was Borsa Italiana with $2.3bn from 7 listings, boosted by the $2.2bn Nexi SpA listing. SIX Swiss exchange pulled in $1.9bn from 2 IPOs, with Stadler Rail’s debut accounting for $1.3bn of that.

Despite its sluggish performance, EMEA is proving to be the region of choice for FinTech listings, particularly in the payments field, as the age of digitization and cashless transactions continues to explode, fueling the need for innovation and technological growth. FinTech listings accounted for more than a third of capital raised and the largest listing was Nexi SpA’s IPO.

Weak reception for Airtel Africa $750m IPO

Share price chart from ADVFN ( https://uk.advfn.com/stock-market/london/airtel-africa-AAF/share-chart )

Shares in Africa’s second biggest telecom company had a disappointing start in conditional trading on the London Stock Exchange today. The initial public offer had been priced at the bottom of the 80p-100p range, and in exchange trading it quickly plummeted 16% from 80p and by 4pm the shares had retreated to around 67p.

Today the trading was conditional, only for holders allocated shares in the global IPO. The shares are set to start trading unconditionally on the LSE from 3 July and Airtel Africa will be dual-listed on the Nigerian Stock Exchange from 5 July.

The offer of 744.0m shares had raised approximately £595 million ($750m), including 39.2m shares offered to Nigerian institutional and high net worth investors for a total Nigerian offer of some $39.4m.

According to this morning’s stock exchange news service RNS announcement : “The offer was oversubscribed with strong interest from a variety of reputed global investors across the United Kingdom, United States, Africa, Europe, Middle East and Asia. Dominant allocation to Global long only, strategic and pre-IPO investors.”

There is an over-allotment option of 67.6 new shares which, if exercised in full, would account for approximately £54m of the offer. Including the overallotment option, the market capitalization at this afternoon’s price is some £2.6bn ($3.2bn), down from the offer valuation of £3.1bn.

After the IPO the free float was 19% but after including pre-IPO investors holdings the free float will be over 25% and it aims to be included in FTSE UK indices.

According to the RNS announcement, Raghunath Mandava, CEO of Airtel Africa, said: “We are delighted by the strong response we have received.. This is a proud moment for the team that has built Airtel Africa into the second largest mobile operator in Africa. We are now the first telecom company to simultaneously list on the Premium segment of the London Stock Exchange and Nigerian Stock Exchange through an IPO.”

According to our article in January and this month in here and today’s article in the Financial Times a consortium of investors including SoftBank Group, Singapore’s sovereign wealth fund Temasek, Singapore Telecommunications and private equity firm Warburg Pincus invested $1.25bn at a valuation of around $4.4bn last October. In January this year Qatar Investment Authority invested $200m at a valuation closer to $5bn.

At that stage it was anticipated that the London and Nigeria IPOs would raise $1.25bn.

The IPO was advised by 8 global banks: JP Morgan, Citigroup, BofA Merrill Lynch, Absa Group Limited, Barclays Bank PLC, BNP Paribas, Goldman Sachs International and Standard Bank.

Indian parent Bharti Airtel aims to use the funds to slash debt and free cash to combat rival Reliance Jio Infocomm in India.

Airtel Africa is the holding company for Bharti Airtel’s operations in 14 countries, including Kenya, Tanzania, Nigeria and Ghana. It is Africa’s second largest telco with over 94m customers, and ranked in the top 2 carriers in most of the countries where it operates, offering 2G, 3G and 4G services, plus mobile commerce through Airtel Money.

Performance had improved after years of losses against financially stronger telco players in Africa, including Vodacom. Rising mobile data consumption had helped it reach a first full year of profit and the figures for the year to 31 March were revenue of more than $3bn and operating profit of $734m.

Airtel Tanzania HQ (photo by Prof.Chen Hualin creative commons by Wikipedia)

Airtel Africa confirms June $750m listing in London

Airtel Tanzania HQ (photo by Prof.Chen Hualin – Own work, CC BY-SA 3.0, creative commons by Wikipedia

Airtel Africa has confirmed that it is going ahead in June 2019 with its $750 million listing on the main market of the London Stock Exchange, as flagged up in January in our article. Owned by India’s Bharti Airtel, it is Africa’s second biggest mobile operator with operations in 14 countries and has 99m subscribers and 14.2m mobile money customers.

It said this week that it is aiming for a premium listing on the main market of the LSE, meaning it will float at least 25% of hits shares. It could offer up to 15% more shares through an overallotment option, according to a report in Financial Times which reports that the group says the exact number of shares to be sold and the indicative price range of the offer will be determined “in due course”.

Airtel will use the proceeds to cut the ratio of net debt to EBITDA (earnings before interest, tax, depreciation and amortization) to 2.5x, according to City AM. It also plans to expand data and mobile money services across Africa.

It is also considering a listing on the Nigerian Stock Exchange, according to reports.

Advisers and joint bookrunners appointed are JP Morgan, BofA Merrill Lynch, Citigroup, Absa, Barclays, BNP Paribas, Goldman Sachs, HSBC and the Standard Bank of Africa but the sole as its advisers. JP Morgan will be sole sponsor; BofA Merrill Lynch, Citigroup and JPMorgan will also act as joint global co-ordinators.

The amount to be raised in the listing is down from the figure of $1bn given by Reuters on 28 May quoting Airtel, and the $1.25bn figure in January and February.

For the year to 31 March it posted revenue of more than $3bn and operating profit of $734m. For more background on the shareholders and earlier capital raises, read our earlier report.

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MTN Nigeria shares soaring after $5bn listing

Telecommunications firm MTN Nigeria has had strong days of trading since it joined the Nigerian Stock Exchange in a listing by introduction on 16 May. As it moves closer to what the company may feel is “fair value”, chances of a future initial public offering (IPO) increase.

The $5.1bn listing of 20.4 billion (20,354,513,050) ordinary shares of MTN Nigeria Communications Plc (MTNN) at N90 per share on the Premium Board makes it the second biggest stock on the NSE after Dangote Cement plc and ahead of Nestle Nigeria plc, according to Bloomberg. It is the Nigerian unit of MTN Group Ltd, Africa’s biggest mobile-phone company.

Journalist Shola Lawal writing in Mail and Guardian newspaper described the scene: “At exactly 2.30pm, when the stock market closed on Thursday, MTN Nigeria’s chairperson Pascal Dozie and Ferdi Moolman, MTN Nigeria’s CEO, excitedly clanged metal sticks on a gong on the crowded trade floor at the Nigerian Stock Exchange (NSE) building. The room, filled with brokers in their maroon jackets, erupted in celebration.”

The shares were priced at N90 and have since climbed some 10% a day to reach N119.75 by close of business on 20 May. The main shareholders are only letting a few shares go until the share gets a higher price, according to an interesting interview by Kayode Omosebi, Team Lead, Financial Advisory at ARM Securities on CNBC. He estimates the stock will keep moving until it gets past N130 when more stock could become available, but his firm estimates “fair value” at N149.

Omesebi adds that interest has been wide including retail investors, and could spark a revival of interest in other equities. It will also widen liquidity across telecom stocks in Africa as investors will have a wider range of shares in South Africa, Kenya, Ghana and other markets.

The NSE listing is part of a settlement with the Federal Government of Nigeria after a $5.2bn fine was imposed for failing to meet at 2016 deadline to register SIM cards. In September 2018 there was a $2bn bill for back taxes, and the Central Bank of Nigeria said it has illegally repatriated $8.1bn between 2007 and 2015.

The initial plan was for a share offer or IPO, and MTN Chairman Dozie was not giving any timetable for when that will come: “We were to have an IPO but due to unforeseen circumstances we couldn’t. Half bread is better than none.”

Oscar Onyema, Chief Executive Officer of NSE, said in a press release: “Having MTN Nigeria listed in our market is a testament of the exchange’s commitment to building a dynamic and inclusive market and creating channels for sustainable investment. This listing will promote liquidity for MTN Nigeria, enhance its value and increase transparency, as our platform remains one of the best avenues for raising capital and enabling sustainable growth for national development”.

Analysts also hope that the listing will encourage international oil companies and two other key telecoms firms, Airtel and Globacom.

Mail and Guardian quotes Ugo Obi-Chukwu, founder of leading financial literacy website, Nairametrics: “The last time we had any major listings was in the early 2000s and it was the Government that stimulated those listings… This will open the floodgates for more listings and possibly renew an interest in the stock market.”

The premium board is “a listing segment for the elite group of issuers that meet The Exchange’s most stringent corporate governance and listing standards. This Board features Dangote Cement Plc, FBN Holdings Plc, Zenith International Bank Plc, Access Bank Plc, Lafarge Africa Plc, Seplat Petroleum Development Company Plc and United Bank for Africa Plc,” according to the NSE.

IPO report 2 – African companies raised $2.2bn in 2018

Africa-focused companies raised $2.17 billion via 18 share offers (IPO) and listings in 2018, but the number is down 25% from $2.89bn raised in 2017 with 26 share offers and listings. According to asset manager Enko Capital, the slowdown was driven by “unfavourable market conditions”.

The Egyptian Exchange had 4 IPOs in 2018, and Ghana, Morocco and South Africa had 2 IPOs each and Botswana and Uganda one each. Six Africa-focused companies also offer shares through IPO on foreign exchanges in London and Australia. The offers included 2 IPOs linked to exits by private equity firms, continuing a trend to develop this as an exit route for private equity growth investors in African enterprises.

Enko Capital adds that the African exchanges enjoyed another 16 new listings in 2018, of which 7 were listing by introduction (down from 8 in 2017), 6 were cross listings (5 in 2017) and 3 were spin-offs as a company separated a part (4 in 2017).

The total number of listings for Africa-focused firms was 34 in 2018 (43 in 2017).

Botswana’s December bank listing

On 13 December 2018, African Banking Corporation of Botswana Limited (BankABC) successfully listed on the Botswana Stock Exchange following an IPO which raised BWP361.05 million ($33.90m). It is Botswana’s fifth largest bank in Botswana by assets and has over 60,000 customers and 330 employees. The IPO featured 180,525,000 shares or 24.9% of its share capital at BWP2.00 each.

Bank ABC is a subsidiary of Atlas Mara through ABC Holdings Limited, also incorporated in Botswana, which is the parent company of a number of sub-Saharan Africa banks operating under the BancABC brand in Botswana, Mozambique, Tanzania, Zambia and Zimbabwe and a group services office in South Africa. The group was formed through mergers and acquisitions and offers personal, business and corporate banking as well as asset management, stockbroking and treasury services.

Egyptian education provider listed Sept

The Egyptian listings included an IPO of some 14.5m shares of Egypt’s Cairo for Investment and Real Estate Development company (CIRA) which was 18.9 times oversubscribed in September 2018. There was also a private offer for 192.5m shares which was 10.6 times oversubscribed, according to this story from African Markets website. The total offer was 207m shares at EGP6.00 each for a total of EGP1.2bn ($70.7m). CIRA is a private education provider in Egypt, targeting both the K-12 and the higher-education segments in six governorates, the main selling shareholder was the Social Impact Capital Ltd, according to Egypt Today.

Recent Africa share listings news

London and South Africa
Old Mutual Limited, an insurance company founded 173 years ago, moved its main listing back to Johannesburg on 26 June and has dual-listings in Namibia, Malawi, Zimbabwe and London, as reported by Bloomberg and Moneyweb. Old Mutual plc terminated its listing on the London Stock Exchange on 25 June, and spun off UK wealth manager Quilter plc which was listed separately on the LSE (and dual listed on the JSE) the same day with a market capitalization of £2.75bn based on a £1.45 share price. It also sold its US asset manager and Latin American units as it believed each unit would be worth more separately. The “home-coming” was marked with a parade in Sandton and events in Malawi, Namibia and Zimbabwe. Old Mutual had moved its head office and primary listing to London in 1999, according to Reuters, but now its prominent riverside London head office is being wound down, with staff down from 120 to 40 in 2018.
The stock was listed in Johannesburg at ZAR28.50, valuing the company at some ZAR140bn ($10.7bn). According to Sanlam analyst Renier de Bruyn, quoted by Bloomberg, the share price did not reflect the hoped-for “value unlock” and Old Mutual was at an “attractive” price-earnings ratio of 7.5x, compared to 13x for its biggest South African rival, Sanlam. Bloomberg quotes Brad Preston, chief investment officer at Mergence Investment Managers Ltd: “Old Mutual’s strategy of trying to build a completely global business I think clearly has failed. We’ve seen them reverse that completely.” It bought United Asset Management Corp in USA for $1.4 billion in 2000 and Skandia AB in Sweden for $8bn in 2006. Between mid-1999 and June 2018 Old Mutual’s shares in Johannesburg returned 480% while Sanlam’s returned almost 2,000%. Sanlam had focused on African markets and reached 34 countries, including buying out remaining shares in Morocco’s Saham Finances SA earlier in 2018 for $1.1bn. Old Mutual is only in 13 countries.
Next step will be the unbundling of shares in Nedbank Group by about December 2018. Old Mutual owns 53% since it bought in under apartheid capital controls in 1986 and it is expected to reduce that to 19.9%.

London
Microfinance firm ASA International listed on the London Stock Exchange on 13 July. Its 85% shareholder Catalyst Microfinance Investment had partially sold half its stake by offering 40m shares at GBP2.24 each. ASA International was set up in 2007 and is one of the larges and most profitable international microfinance institutions, with 1.8m clients, particularly low-income and underserved women entrepreneurs. It operates in Asia (7)%) and in Africa (30% of clients, including in Tanzania, Uganda, Kenya, Rwanda, Nigeria, Ghana and Sierra Leone. It has 1,387 branches and employs 9,000 staff.

Mauritius and London
Grit Real Estate Income Group, a pan-African real estate company based in Mauritius and investing in 7 countries Botswana, Kenya, Mauritius, Morocco, Mozambique, Ghana and Zambia with plans for Senegal and the Seychelles, raised $132.1m through selling 92.4m shares at $1.43 each, before listing on the London Stock Exchange main board on 31 July. The new funds are for more investments in Mozambique and Ghana. Previously there were 214m shares listed in Johannesburg Stock Exchange and Stock Exchange of Mauritius. Bronwyn Corbett and Sandile Nomvete built the Delta International Property Fund from R2.2bn to R11.8bn. It became Mara Delta Property Holdings and was then rebranded Grit and the company headquarters moved to Mauritius, according to this 2017 interview in Finweek magazine.
Corbett commented in a press release: “”We are delighted to have successfully completed our Listing on London Stock Exchange and we are proud to be the first London listed pan-African real estate group”. Earlier she was quoted saying the African real estate sector “offers some of the best returns in the global property market. We have a proven track record of generating income from our selective and diversified range of assets, built through our close and detailed understanding of the region’s property investment environment. The listing will support our aim to grow our portfolio further and become the leading real estate owner on the African continent outside South Africa.” The share price was set at net asset value and the aim is to yield 12% a year in US dollars.

Nigeria
The Federal Government of Nigeria listed a NGN10.7 billion ($29.5m) FGN Green Bond 2022 on the Nigerian Stock Exchange on 21 July. It offered a coupon of 13.48% and aims to finance initiatives including solar plants and hydropower.

South Africa
Anchor Capital became the 9th listing on the A2X Markets on 19 July through a secondary listing. It was listed on the Johannesburg Stock Exchange’s AltX platform in September 2016 after raising ZAR60m ($5.4m) through an IPO.

Some African IPOs – August 2018

Uganda – CIPLA-Quality Chemicals IPO closes 24 August
CIPLA-Quality Chemicals Ltd opened its initial public offer (IPO) on 13 August and will close on 24 August, aiming to list on the Uganda Securities Exchange on 24 September. The pharmaceutical company aims to raise $45 million through offering a 18% stake via 657,179,319 shares at UGX256.50 per share, according to Reuters. The company manufactures drugs that include anti-retroviral, anti-malarial and Hepatitis B medicines and its products are sold in Cameroon, Comoros, Kenya, Namibia, Tanzania, Uganda and Zambia.
India’s Cipla Limited, Uganda’s Quality Chemicals and the Government of Uganda set up the company as a joint venture in 2005, and TLG Capital and Capitalworks Investment Partners invested in the company in 2009, holding stakes worth 12.50% and 14.40% respectively. Lead transaction advisor was reported to be Renaissance Capital in Kenya and Crested Capital in Uganda is the lead sponsoring broker.
it ends a 6-year listing drought as the previous IPO in Uganda was Umeme in 2012.

CIPLA-Quality Chemicals in Kampala (file photo)

Egypt – Giza Spinning & Weaving probably Q4
The IPO of garment maker Giza Spinning & Weaving is set for the fourth quarter, probably November. According to reports, the aim is to sell a 40% stake to finance investment of EGP250m ($14m) into expanded production of garments and yarn. The company employs around 4,800 and was set up in 1979. It is the biggest garment exporter in Egypt by volume and the sixth largest by dollar value, with 87% of production exported to the USA and Europe in 2017. Beltone Financial will be the global coordinator and book runner and a roadshow will run in October, according to Bloomberg.

Uganda – MTN under pressure to list
MTN Group Ltd, which has 55% of the mobile market in Uganda with about 10.9m subscribers, is seeking to renew its 10-year licence in October. Godfrey Mutabazi, executive director of Uganda’s telecom regulator, says that selling shares on the local bourse isn’t a pre-condition for the granting of a new 10-year contract, but Uganda wants “Ugandans to be part of the company,” according to this Bloomberg report.

MTN Ghana – IPO closed 31 July
The IPO of Scancom PLC, the name of telco MTN in Ghana, closed on 31 July as par of bids for a local licence. It was selling 35% of the company, in line with discussions with the regulator. Details are to be announced soon and trading could begin from 5 September. It is set to be the largest listing on the Ghana Stock Exchange and shares could also be bought using the MoMo Wallet mobile-money platform. MTN has more than 221m customers across 22 markets in Africa and the Middle East. It had agreed with telecom regulators in Ghana and Nigeria to list its local units, and the offer was set to raise GHS3.5bn ($725m).

MTN Nigeria “not yet applied”
MTN had not yet applied for a listing by 9 July, according to a news report which quoted the Securities and Exchange Commission. Previously it had been reported that the listing could go live in August, when Reuters reported on pre-IPO documents in February 2018. It said that MTN planned to list by July and raise at least $400m to cut debt in its Nigeria unit, which was valued at $5.23bn. The Nigerian pledge to list cwas part of a settlemetn whcih also included a $1bn fine in 2016.

Airtel – London or Johannesburg in 2019
Airtel is reported to be aiming to raise up to $1.5bn by listing 25% of the equity in its Africa unit in early 2019, according to this report on Bloomberg, as part of plans to reduce its debt by $4.6bn over three years. Airtel is India’s top wireless operator. It also was reported to be planning to sell part of its stake in a $14.6bn company owning tower infrastructure, formed when Bharti Infratel Ltd merges with Indus Towers Ltd. It is owned by billionaire Sunil Mittal and is hoping to keep its Moody’s credit rating at Baa3. It sold about 8,300 towers in 7 African countries for some $1.7bn in 2015 and in 2016 sold its towers in Tanzania for $179m and sold its Burkina Faso and Sierra Leone units for some $1bn the same year. In 2010 it paid an enterprise valuation of $10.7bn for the African assets of Kuwait Mobile Telecommunications Co, also known as Zain.

Kenya – National Oil Corporation aims at Nairobi and London in 2019
The Government of Kenya plans to raise up to KES103bn ($1bn from a dual listing of shares in state-owned National Oil Corporation in Nairobi and London, according to this news report in Business Daily. NOC needs the money to exercise its rights to buy back shares before production at the Turkana oil field, discovered in 2012.
Petroleum principal secretary Andrew Kamau told the Business Daily that the contract for the concession of oil blocks in the Turkana oil fields to existing operators has a clause allowing the government to exercise a back-in right, which essentially means buying back a percentage of the ownership before production kicks in. “When you sign a contract you have a right to buy back some share, before production. The percentage we can buy back is 15 in one block and 20 in the other. The listing should raise enough money for the purchase,” said Mr Kamau, without indicating whether the State would exercise its rights for the entire stake under the clause. The two blocks are owned by British firm Tullow (50%), Africa Oil (25% and Total (25%). The Government and Tullow was to start small scale crude production of about 2,000 barrels a day in 2018, with full production due from 2021 after building a $2.1bn pipeline to Lamu on the coast, according to Reuters.

London – Intercement delays to 2019
Intercement is to delay its $1.8 billion IPO on the London Stock Exchange from the second half of 2018 to early 2019, according to reports. It makes cement and related products in Brazil, Portugal, Argentina, Mozambique, Cape Verde, Paraguay, South Africa and Egypt and was founded in 2008.

For fuller analysis of recent and upcoming IPOs across Africa, see the website of the Enko Africa Private Equity Fund, a $63.4m fund focused on pre-IPO opportunities across Africa.

Africa-focused Vivo Energy soars after £548m IPO on London SE

Africa’s £1.98 billion ($2.68bn) megalisting Vivo Energy (VVO) soared in its first 2 days of trading on the London Stock Exchange (dual-listed on the Johannesburg Stock Exchange) at the close of last week. After a successful initial public offer (IPO) of shares at 165.00 pence per share for 323.3 million shares, 27.7% of the company, it listed on the LSE on 10 May and traded up 11% on Thursday to 183.20p, before soaring as high as 198.10p on Friday 11 May and then closing at 185.0p.

Vivo raised £548m ($742m) in the share offer, which was the largest UK-listed African IPO since 2005, when Telecom Egypt raised about £650m, and the biggest IPO in London so far this year.

It listed on the Premium Segment of the LSE Main Market. Global coordinators of the deal were Citigroup, Credit Suisse and JP Morgan.

According to the LSE press release, Christian Chammas, CEO of Vivo Energy: “We have been extremely pleased with the investor response to our offer, in what has been a challenging period for the wider markets. Vivo Energy’s differentiated business model, strong track record, exposure to Africa and the growth opportunity it represents has been well understood by investors. We are excited about the momentum in the business and are looking forward to delivering further growth and success as a London listed company.”

In an article in Financial Times Chammas described Vivo as offering international investors exposure to a diverse group of mostly fast-growing African economies with rapidly expanding urban populations: “We are at the heart of the growth story, the growth of Africa’s population and consumer demand.”

Vivo is a retailer and marketer of Shell-branded fuels and lubricants in Africa, operating about 1,800 service stations across 15 African countries, with Morocco its biggest market. It is expanding fast, and is second in Africa after Total. It is owned 55% by oil trader Vitol Group SA of Switzerland, and 44% by private equity group Helios Investment Partners and 1% by management. Last year earnings before interest, depreication and amortization (EBITDA) was $326m. In December it announced a ZAR3.5bn ($256m) share swap transaction with Engen, South African unit of Malaysia’s Petroliam Nasional Bhd, which would add 9 more countries and 300 more service stations, which was awaiting regulatory approval.

According to another article in the Financial Times: “People close to the deal said that investor appetite was strong and the listing was more than two times subscribed. The transaction could unlock other African-focused IPOs that had been waiting until a company successfully tested the market.”

Nigeria’s Dangote Cement, which operates across more than 10 African countries, could be planning to raise between $1.2bn and $2bn by floating 10%-15% of the business, according to chairman Aliko Dangote. In May it announced the appointment of non-executive directors Mick Davis (former Xstrata chief executive) and Cherie Blair (lawyer and wife of former UK prime minister Tony Blair).

Another potential large African listing on the London Stock Exchange in 2018 is Liquid Telecom, which describes itself as: “the leading independent data, voice and IP provider in eastern, central and southern Africa. It supplies fibre optic, satellite and international carrier services to Africa’s largest mobile network operators, ISPs and businesses of all sizes. It also provides payment solutions to financial institutions and retailers, as well as award winning data storage and communication solutions to businesses.”

In March Africa-focused mobile phone tower firm Helios Towers, dropped plans for an IPO because of weak investor appetite. Regional rival Eaton Towers had also been considering a listing.

Vivo Energy (photo credit Vitol)

African issuers raise $1.4bn in IPO share offers in 2017

African share issuers have raised $1,379 million ($1.4bn) in 2017 through initial public offers (IPOs) of shares, compared to $1,154m ($1.2bn) in 2016, the second year of increase. However, the number of domestic African IPOs was down to 7, compared to 15 in 2016. The number of cross-border IPOs in Africa was 2 in each year.

The research was released today (15 December) in the latest Global Cross-Border Index from law firm Baker McKenzie. African issuers raised a total of 19.5% more capital in 2017 through IPOs was up 19.5% on 2016. Worldwide, issuers have increased IPO activity by 44% to $206.6bn and there were 1,694 new listings, up 31%.

Swiss issuers accounted for both cross-border IPOS in Africa in 2017. Aspire Global Plc listed on the Nasdaq First North Exchange, raising $38.96m, and Rainbow Rare Earths Ltd raised $8.22m when it listed on the London Stock Exchange. The total they raised was $47m, compared to $246m raised through cross-border IPOs in 2016.

Wildu du Plessis, Partner and Head of Africa at Baker McKenzie in Johannesburg, commented in a press release: “Africa’s uneven FDI (foreign direct investment) picture reflects the global uncertainty, but local challenges aggravate the unevenness.

“IPO activity is highly dependent on political and economic instability, particularly in the key markets of South Africa, Kenya, and Nigeria. In 2016, more FDI flowed to the hub economies, with new East and West Africa clusters emerging. This trend also dominated in 2017, and while South Africa has the most attractive exchange for issuances, the new clusters are shaping up to drive the IPO landscape going forward.”

“African economies have also engaged in repricing. The most tangible manifestation of this repricing has been rapid fall in some currencies as export revenues slid. This has created shortages of foreign exchange. The currency slide, has in turn, led to an increase in consumer prices, which impacted the retail, logistics, and other consumer-oriented sectors. Currency falls, however, can also create longer-term opportunities, because assets become cheaper,” he said.

Du Plessis added that he expected in coming years that more governments across Africa will privatize state-owned entities through listings, this would boost development of regulatory frameworks. In turn this will inspire market confidence in African bourses. Privatizations can be partial or full.

“In addition, removing barriers to cross-border investments through regional integration, would harmonize regulations and increase cross-border investments. This would provide more choices of financial products for investors in future,” he noted.

Global IPOs

According to Baker McKenzie, worldwide IPO volumes in 2017 reached the highest level since 2007. Momentum built through the year with an acceleration in both volume and value of capital raised in the second half. In total, 1,694 companies raised $206.6bn from IPOs, a jump of around a third in both value and volume on 2016. Both cross-border and domestic activity grew.

Cross-border deals jumped by 60% in volume, growing in all regions, including Latin America, which saw its first cross-border listing in 10 years. However, growth in cross-border capital was once again outpaced by growth in domestic capital raising, which rose 55% in value. This led to a slight decline in Baker McKenzie’s Global Cross-Border Index.

Koen Vanhaerents, Global Head of Capital Markets at Baker McKenzie, commented: “The IPO market in 2017 has put in its best performance in 10 years. A more stable political environment in some of the key markets, combined with strong economic growth, has boosted both the number of listings and the volume of capital raised.”

“With key risks to the global economic outlook easing, we expect IPOs to hit a new post-financial crisis high in 2018,” he added. “We recently forecast that domestic IPO activity will continue to rise, to a peak of over $220bn in 2018.”

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