Economic gurus say Africa needs to industrialize, but Africa seems two jumps into the future and most of the initial public offerings (IPOs) for 2016-2017 will be technology, healthcare, telecoms and even securities exchanges.
Word on the streets of Tanzania’s coastal city is that the IPO of the Dar es Salaam Stock Exchange is oversubscribed. The bourse aimed to raise TZS7.5 billion ($3.49 million) in the IPO which closed on June 3 and results were not available as we went to press. It is Africa’s third securities exchange to go through demutualization and self-listing – target date is July 12 for the listing. The stock exchanges in Nigeria and Ghana are among others in the process.
Ben Nice, editor of TMT Finance, says the high-tech rush continues: “Despite global volatility, regional macroeconomic uncertainty, and a rout on commodity prices, recent forecasts are predicting that the next 12 months could see a rebound with IPOs set to reach their highest levels in Africa since 2010, and several TMT (technology, media and telecommunications) companies looking likely to float in 2016 and 2017.”
Africa Internet Group (AIG) is said to be planning an IPO by 2017. It is parent of the Jumia e-commerce brand, present in 11 countries and linked to online and mobile consumer services such as Kaymu (shopping), hellofood (food delivery), Jovago (hotel booking), Vendito (classified ads), Lamudi (real estate), Everjobs (jobs) and Carmudi (vehicles). In April, AIG announced $85.4million equity investment from phone company Orange and in March $341.5 million from Goldman Sachs, MTN, AXA and Rocket Internet.
IHS Towers, based in Lagos and owner of over 23,300 mobile phone towers in Nigeria, Cameroon, Côte d’Ivoire, Zambia and Rwanda, is expected to float shares within 12 to 24 months. In December, Chief Executive and Founder, Issam Darwish, a FORBES AFRICA cover in March 2014, said it would be “the biggest IPO ever in Africa”.
Orange Egypt, rebranded from Mobinil in March, is preparing an IPO for the Egyptian Exchange, with an offering of up to 20% of the shares. It has 33.4 million customers and is Egypt’s second biggest operator after Vodafone. In March, it announced Orange intended to invest $281.5 million into upgrading networks and services.
In May, private equity giant The Abraaj Group exited Tunisian pharmaceutical company Unité de fabrication de médicaments (UNIMED) via an IPO on the Bourse de Tunis, the first this year. The IPO valued UNIMED at $150 million and was 32.6 times over-subscribed, a bourse record. Since 2010, Abraaj has helped the group expand and in 2015 exports to more than 17 countries contributed 35% of sales.
“We recognized the healthcare opportunity in North Africa early on, in a market with a growing middle class, rising healthcare expenditure and expanding life expectancy,” says The Abraaj Group’s Managing Director Adel Goucha.
Shares in Cleopatra Hospital Company started trading on the Egyptian Exchange on June 2 after raising $40.5 million through an IPO which closed on May 30. The group, which owns four hospitals, had offered 40 million shares or 25% of the capital. The public offer was 28.6 times oversubscribed and the institutional offer 6.7 times, after roadshows programmed for Dubai, South Africa, Britain and the United States. It remains majority-owned by Care Healthcare, which includes Abraaj, European Bank for Reconstruction and Development, Germany’s DEG and France’s Proparco as shareholders. Abraaj, which invested in 2014, said the IPO would fund more growth.
Things were not going so well in Ghana, where Agricultural Development Bank (previously owned 52% by government and 48% by the Bank of Ghana) held an IPO between December and March and raised $115.5 million. Four unnamed investors snapped up 72% of the 75.5 million shares in the new offer but the bank’s board rejected all bids at GHS2 per share and the bank failed to raise the GHS100 million ($26 million) required. It was due to return money to applicants and ask Ghana’s Securities and Exchange Commission for permission to reopen the IPO.
In May, Barclays raised $876 million from selling a 12.2% stake in Barclays Africa Group (103 million shares at R126 each, a 6.5% discount to the market) in an oversubscribed offer with the Public Investment Corporation said to be a big buyer. Barclays is considering selling its remaining 50.1% stake to a strategic investor. Former Barclays CEO Bob Diamond and his Atlas Mara group may be a buyer.