Afreximbank seeks $100m of $300m D.Receipt from Kenya

In a bid to attract the Kenyan investors to its ongoing Depository Receipt targeting $300 million, the African Export-Import Bank recently treated leading Kenyan investors to a breakfast meeting to present its equity offering.

The offering is aimed at raising between $100m and $300m through the issuance of Depositary Receipts backed by its Class “D” shares.

The listing of the Depositary Receipts on the Stock Exchange of Mauritius was approved in August, this opened Afreximbank’s shareholding to the investing public through an African Stock Exchange, first of its kind 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 Lions Head Capital as co-advisors. The minimum investment amount is $30,000.

Afreximbank Executive Vice-President, Dr. George Elombi, in his address said that the Depositary Receipts were aimed at enhancing the bank’s capitalisation in order to support the growth of its trade finance interventions across Africa and were being issued in the context of the Bank’s five-year strategy, IMPACT 2021: Africa Transformed.

That strategy focused mainly on boosting 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, he said.

Under the strategy, Afreximbank was targeting to mobilise up to $1bn in equity from new and existing investors in the next five years through various financial instruments, he said, adding, “We are seeking to raise between $100m and $300m (of that amount) through the issuance of the Depositary Receipts.”

“We invite the Kenyan investment community to take advantage of the unique benefits the Depositary Receipts offer, including 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,” added Elombi.

Managing Director of CBA Group, Isaac Awuondo, said that the listing of the Depositary Receipts on the Securities Exchange of Mauritius, would enable local and foreign investors to benefit from a liquid and freely transferable instrument and would give them the opportunity to own a portion of one of the largest financial services multilateral institutions that is leading the charge in facilitating trade finance activities between Africa and the rest of the world.

Chairman of SBM Group, Kee Chong Li Kwong Wing announced that the government of Mauritius planned to grant permanent residency to individuals who invest up to $500,000 in the Depositary Receipts.

The event attracted more than 70 participants, including fund managers, stockbrokers, family offices, high net worth individuals and prominent business leaders. It follows a highly successful event organised by Afreximbank in Lagos last month and aimed at the Nigerian investment community.

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.