Afrexim plans se­condary list­ing of de­pos­i­tory re­ceipts

Business Daily (Kenya) - - MONEY & MARKETS - Brian Ngugi bn­[email protected]­tion­

The African Ex­port Im­port Bank (Afrex­im­bank) plans a se­condary list­ing of its de­posi­tary re­ceipts to di­ver­sify its share­holder base and add more pri­vate in­vestors in its regis­ter.

The Cairo-head­quar­tered pan African trade fi­nancier is work­ing with ad­vis­ers on the list­ing but its Pres­i­dent Bene­dict Oramah did not pro­vide time­lines or mar­ket.

“Prof Oramah an­nounced that the Bank was plan­ning a se­condary list­ing of its de­posi­tary re­ceipts in or­der to im­prove liq­uid­ity and ac­cess to di­ver­si­fied in­vestor base,” the bank said.

“It had also ex­plored al­ter­na­tive sources of fund­ing the balance sheet and de­ployed ex­cess cash hold­ings to fi­nance loans with bet­ter in­ter­est mar­gins.”

Afrex­im­bank Au­gust last year in shillings that Afrex­im­bank had raised as at 2016 to fi­nance its ac­tiv­i­ties opened its share­hold­ing to Kenyan in­vestors after it launched a $300 mil­lion (about Sh31.1 bil­lion) equity of­fer­ing on the Mau­ri­tian Stock Ex­change, us­ing de­posi­tary re­ceipts backed by its Class “D” shares.

Through the is­sue of the de­posi­tary re­ceipts, the lender opened up share­hold­ing to the pub­lic who would own class D shares. De­posi­tary re­ceipts are in­stru­ments through which com­pa­nies raise equity cap­i­tal in other ju­ris­dic­tions with­out phys­i­cal list­ing the shares on an ex­change in the ju­ris­dic­tion.

The African Ex­port-im­port Bank had ear­lier said it plans to sell shares worth as much as $1 bil­lion (about Sh102.6 bil­lion) through is­sue of fresh re­ceipts in­clud­ing in Nige­ria over the next five years in or­der to di­ver­sify its share­hold­ers’ regis­ter.

The lender has raised more than $3 bil­lion (about Sh307.8 bil­lion) as of 2016 to fund its ac­tiv­i­ties, with about $1 bil­lion com­ing from Eurobonds, far short of the con­ti­nent’s soar­ing de­mand for fi­nanc­ing for African economies hurt by lower com­modi­ties price.

Afrex­im­bank was founded by African govern­ments and other in­vestors in 1993.

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