Afinitas Limited, the green field investment company incorporated in Botswana, says its initial public offering (IPO) on the Botswana Stock Exchange (BSE) was warmly received by investors. ┬áThe financial services company listed on the local bourse recently, looking to raise P28.8 million to finance its forays into Africa. The IPO calendar opened on 26th June and will close on July 17th, while the listing and trading in Afinitas shares will commence from 27th July, 2015.
In an interview with Sunday Standard, Afinitas Executive Director Leutlwetse Tumelo said the company has received positive feedback since the opening of its IPO calendar late last month.
“We continue to receive numerous phone calls and office visits from prospective investors. We are encouraged by the fact that we have already raised P91.2m in private placement from local fund managers,” he said.
The P91.2m was raised through private placement from local fund managers African Alliance, Investec and Afena Capital, which garnered them a respective shareholding of 25 percent, 7.5 percent and 5.5 percent each. Upon the completion of the IPO process and subsequent listing on the Venture Capital of the BSE, Afinitas intends to adopt a pan-African investment strategy and seek investments across diverse industry sectors.
“Afinitas is focused on establishing and developing new businesses across Africa. The company seeks to increase shareholder value by providing seed investment into a number of new companies focused on different strategies or countries within the continent of Africa,” said Tumelo.┬á
“Initially each subsidiary will be 100 percent owned by Afinitas Limited. It is likely that each subsidiary will require a second round of capital raising. Due to limited capacity of the local market, these funds are likely to be raised from external investors.”
Tumelo further pointed out that Afinitas intends to take advantage of the new global interest in Africa as an investment destination, especially from large institutional investors.
“Interest in Africa from European funds is at an all time high and that is driving the emergence of new investment opportunities within the continent. Afinitas is about the African story. We created a company that will leverage on Botswana’s IFSC and reputation as an attractive investment destination to launch into the rest of Africa,” said Tumelo.
In recent years, Africa has experienced a period of rapid economic growth that may reflect a long term, self-sustaining and positive growth cycle. The business climate in Africa is also improving due to a number of factors such as improved telecommunications and better governance in general. Tumelo further said that less intense business competition in Africa than in more developed markets may manifest itself in higher achievable rates of return on equity.