In a first for African capital markets, the African Export Import Bank ( Afreximbank) has opened its shareholding to the public through the issuance of depository receipts. The listing of the Depositary Receipts on the Stock Exchange of Mauritius was approved in August, opening Afreximbank’s shareholding to the investing public through an African stock exchange, marking a first for a supranational bank. The issuance of the Depositary Receipts is being handled by an advisory syndicate made up of SBM Group of Mauritius as lead arranger and Kenya-based CBA Capital and LionsHead Capital as co-advisors. The minimum investment amount is Kshs. 3 Million.
The depositary receipts offer investors the same rights as normal shareholders, but issuing them does not come with the same regulatory requirements as issuance of normal shares. The offer will be listed on the Mauritius Stock exchange on 4th October 2017.
The bank intends to enhance its capitalization in a bid to narrow the trade financing gap in Africa currently estimated at USD 120 Billion annually. It also wants to meet its strategic objective of growing intra-African trade accelerating the industrialisation and export development capacities of the continent, and expanding the Bank’s trade services to the African banking sector. The bank is aiming to raise between USD 100 Million and USD 300 Million in this issue and USD 1 Billion in the next 5 years.
During the launch of the offering yesterday, Dr. George Elombi, Afreximbank Executive Vice-President indicated that the Depositary receipts had unique benefits to offer. These include liquidity, attractive dividend yield, capital gains and a currency hedge, being a U.S. dollar instrument. It is also an opportunity for investors from Africa and beyond to support the Bank’s efforts to contribute actively to the economic transformation of the continent. Kee Chong Li Kwong Wing, Chairman of SBM Group, also announced that the government of Mauritius planned to grant permanent residency to individuals who invest up to $500,000 in the Depositary Receipts.
Afreximbank’s shareholders are a four-tier mix of public and private entities, with Class “A”, constituted of African states, African central banks and African public institutions; Class “B”, made up of African financial institutions and African private investors; Class “C”, with shares held by non-African investors, mostly international banks and export credit agencies; and Class “D”, under which fully paid shares can be held by any investor.