A new pan-African focused investment firm, Afinitas Limited, is gearing up for a P30 million Initial Public Offer (IPO) on the Botswana Stock Exchange (BSE).
The greenfield venture, which recently concluded a P90 million private placement, has already been granted regulatory approval to list 240 million ordinary shares on the Venture Capital board of the BSE.
Local fund managers such as African Alliance, Investec and Afena Capital participated in the private placement giving them a respective 25 percent, 7.5 percent and 5.5 percent shareholding in Afinitas.
According to the company’s IPO calendar, the shares sale will open on June 26 and close on July 17 2015 at P1 per share. It is expected that the listing and trading in Afinitas shares will commence from July 27, 2015.
“Afinitas is focused on buying equity into existing firms and establishing new businesses across Africa. The company seeks to increase shareholder value by providing the seed investment into a number of new companies focused on different strategies or countries within the continent.
“Interest in Africa from European funds is at an all time high, and this is driving the emergence of new investment opportunities within the continent,” said Executive Director of Afinitas, Leutlwetse Tumelo.
Soon after the listing, the company will buy a 50 percent stake in a firm that is involved in organising the Africa Financial Services Investment Conference (AFSIC).
The London-held conference, which was attended by 220 companies representing 25 different African countries in 2014, is forecast to make a profit after tax of $280,000 (P2.8 million) next year rising to $1.2 million (P12 million) by 2018.
The share of Afinitas’ dividends from the 50 percent shareholding in the conference is seen at $70,000 (P7 million) in 2016 before rising to $302 million (P3.02 million) in 2018.
Apart from AFSIC, the company eyes to make various other investments ranging between $2 million and $4 million in industries such as financial services, insurance companies, leasing companies, fund management companies, deposit taking companies and lending companies, Tumelo told Mmegi Business.
Other service sector companies earmarked by Afinitas include those in human resources and outsourcing where it is believed that Africa has a competitive advantage due to its large, youthful and increasingly educated workforce.
“The arrival of the internet and mobile telephony across Africa, and recent improvements in the speed of the internet on the continent is providing new companies with the opportunity to exploit ‘online’ business models that may be more cost effective than existing business models operating across Africa.
This has proven to be the case in many industries in the developed world, and is likely to occur in Africa as the speed and efficiency of communications in the continent continue to improve.
“The improvements in communication will facilitate the offshoring of business from developed markets into the lower cost economies of Africa, and that this provides a significant business opportunity for the company,” reads their prospectus.
Among the directors of Afinitas include Tumelo, Lesang Magang, Dawn Pickering and managing director, Rupert McCammon, the current beneficial owner of the AFSIC conference.