AYO has R5.3bn in offers for its shares
Placement is oversubscribed
A PRIVATE placement by AYO Technology Solutions was significantly oversubscribed, with offers worth R5.3 billion received for shares in the majority black-owned ICT company, 23 percent more than the company wanted to raise.
The company, which is a spin-off of African Empowerment Equity Investments (AEEI), said earlier this month it would undertake the private placement by way of an offer to invited investors to subscribe for private placement shares in AYO Technology at R43 a share, thereby raising R4.3bn.
Khalid Abdulla, chief executive of AEEI, said yesterday that the amount it was seeking to raise in the private placement would not be increased and successful invited investors would be advised of their allocations by yesterday.
“AYO Technology is pleased to announce that it received strong demand for its private placement that closed on Friday, with the book being oversubscribed.
“AYO Technology received irrevocable commitments from invited investors to subscribe for shares in AYO Technology to the value of R5.3bn, well in excess of the R4.3bn sought to be raised in terms of the private placement,” Abdulla said.
The private placement will reduce AEEI’s shareholding in AYO from 69.55 percent following the broad-based black economic empowerment consortium share issue, to about 49 percent on the listing date.
AEEI has already successfully listed Premier Fishing and Brands separately on the main board of the JSE this year.
The subsidiary raised R526 million capital through the issue of new shares on the listing date. AYO will list in the “Computer Services” sector of the main board of the JSE on Thursday.
AYO companies have international partnerships with leading technology suppliers, including InterSystems Corporation, JAC (UK), Microsoft and Fujitsu Computers.
The group also holds a 30 percent stake in British Telecoms SA.
AYO currently holds a 25 percent market share of the South African public hospital sector and manages the country’s national health laboratories.
The group also boasts blue chip clients and partners, such as all the major banks, Nokia, Siemens, Cisco, and Microsoft.
Little attention Asief Mohamed, the chief investment officer at Aeon Investment Management, said investors would pay little attention to the scandal engulfing JSE-listed companies but would fixate their attention on AYO’s profitability and valuation.
“There is going to be a lot of investment in the ICT and IT sector as companies and government look to the sector to improve their efficiencies and processes.
“This means there are good prospects for a company like AYO,” Mohamed said.
AEEI said in financial results for the six months to February said that its ICT division grew organically in the period.
The division’s revenue for this reporting period increased by 119 percent to R234 million, while operating profit grew 17 percent to R197m.
AEEI’s ICT arm has already acquired 51 percent of the equity and voting interests of Headset Solutions and a 57 percent equity and voting interest in Puleng Technologies in recent months. “AYO Technology’s growth strategy will be enabled by the capital raised pursuant to the private placement.
“The capital raised, the strategic relationship with BT and the strong acquisition pipeline will enable AYO Technology to be one of the most empowered multidiscipline ICT groups with a full suite of products and services that is able to deliver turnkey ICT solutions to any client,” AYO said in its pre-listing statement.