Untu seeks to raise $5m
ALOCAL microfinance institution, Untu Capital, is seeking to raise $5 million through listing on the Financial Securities Exchange (Finsec) Alternative Trading Platform board before year end. The proposed listing would become third after the Infrastructure Development Bank of Zimbabwe listed its energy bonds on the fixed income trading board by way of introduction yesterday.
Old Mutual was the first to trade on the platform in December last year after it listed its empowerment shares making up 25 percent of the group.
“Some regulatory approvals have already been obtained and a prospectus should be coming out; hopefully next week,” a source privy to the transaction told The Herald Business.
“It is a micro finance institution involved in on lending business and it is seeking to raise funds to boost its lending capacity. They are looking at raising about $5 mil- lion.”
Escrow group chief executive Collen Tapfumaneyi confirmed the development but could not be drawn into revealing further details citing confidentiality of the matter.
“It is true, there is a company coming on board but official announcement will be made in line with regulations governing capital markets,” Mr Tapfumaneyi said in an interview.
Following the listing of the IDBZ energy bonds, chief executive Thomas Sakhala, said the bank was also looking at listing some of its housing bonds once fully subscribed.
“The tradability of the instruments is an important factor for investments and we will be listing some of our housing bonds and other future bonds issuance in line with practice with other markets in order to give investors flexibility,” Mr Sakhala told market players during the event of the listing of the energy bonds.
IDBZ would start listing the $14,9 million bond issued to develop about 1 500 low, medium and high residential stands in Kariba and the $12,5 million bond issued to develop a project in Harare, the bank’s head of resource mobilisation Mr Willing Zvirevo said in an interview yesterday.
The rationale for listing the bonds is to broaden market participation to include stockbroking forms, custodians, individuals and institutional investors.
The listing also enhances the liquidity of the bonds due to wider access that buyers and sellers will have to professional broking services on the Finsec. It also allows for a market price discovery. It also become easier for investors to sell when the debt securities are listed and do not necessarily have to wait until maturity.
By listing, the instruments will become more tradable.
This will also provide an opportunity to potential investors who would have missed out when the bond was issued as they can buy from the current holders.