African Export-Import Bank (Afreximbank), says it is opening its shareholding to the investing public with a $300 million equity offering through the issuance of depositary receipts.
A statement by the bank’s Head of Communications, Mr Obi Emekekwue, revealed that the equity offering would be held under its Class “D” shares.
The bank’s Class “D” are fully paid shares which can be held by any investor.
The deal, whose listing has been approved on the Stock Exchange of Mauritius, subject to raising the funds by September 30, is being handled by SBM Group, a leader in the financial sector in Mauritius.
The equity offering is the first time a supranational bank is issuing depositary receipts through an African stock exchange.
Dr Benedict Oramah, the President of Afreximbank, said that the aim was to enhance the bank’s capitalisation in order to significantly narrow the trade financing gap in Africa currently estimated at 120 billion dollars annually.
Oramah said the seed funds would enable the bank meet its strategic objective of growing intra-African trade in all regions of the continent, including island economies.
He said the bank had chosen Mauritius because it had conducive regulatory framework for this innovative equity offering.
“On the other hand, SBM possesses the competencies, investor contacts, and support capabilities for the issuance of the depositary receipts.
“The depositary receipts issuance represents an opportunity for Afreximbank to diversify its shareholder base by enabling investors in Africa and beyond who have not yet invested in the bank to do so.
“It is also to strengthen Africa’s premier trade finance institution whose interventions in its various member countries have created acknowledged developmental impacts across the continent,” he said.
Oramah said he was optimistic that the novel issuance would further deepen Africa’s capital markets and pave the way for similar issuances by other multilaterals.
Kee Chong Li Kwong Wing, Chairman of SBM Holdings Ltd, said it was a privilege for SBM to have been saddled with the responsibility to execute such an important transaction.
Li said it was high time global investors tapped into Africa’s huge potential by investing in Africa.
Afreximbank shareholders are a four-tier mix of public and private entities with Class “A” consisting of African states, African central banks and African public institutions.
Class “B” is made up of African financial institutions and African private investors, while Class “C” consist of non-African investors mostly international banks and export credit agencies.
The bank’s two basic constitutive documents are the Establishment Agreement which gives it the status of an international organisation and the Charter which governs its corporate structure and operations.
Since 1994, it has approved more than $51 billion in credit facilities for African businesses, including about $10.3 billion in 2016.
Afreximbank had total assets of $11.7 billion as at Dec. 31, 2016 and is rated BBB+ (GCR), Baa1 (Moody’s), and BBB- (Fitch). The Bank is headquartered in Cairo.