Rand Merchant Bank Botswana (RMB), a division of First National Bank Botswana (FNBB) was appointed the sole book-runner and Johannesburg Stock Exchange (JSE) sponsor to Choppies Enterprises Limited on its R1.356 billion (P 1.1 billion) equity capital raising and secondary inward listing on the JSE. The transaction facilitated a R575 million primary capital raising for Choppies, that would fund the mega retailer’s ambitious expansion plans. It also facilitated a R784 million sell-down by Choppies directors and management to achieve the necessary free-float and improve liquidity on the JSE.
In an interview with Sunday Standard ,RMB Botswana Country Head Pauline Motswagae said that the merchant bank was responsible for overall project management and coordination to ensure timely and successful execution of the Initial Public Offering (IPO).
“We advised Choppies on the appropriate preparation, offer structure and marketing strategy to achieve an optimal outcome,” she said.
She further stated that RMB assisted Choppies in developing its investment case and positioning the company with investors, as well as marketing Choppies to a broad range of institutional investors in Botswana, South Africa and the United Kingdom. The offer generated strong interest and was significantly oversubscribed with more than 60 high-quality institutional investors
“In its role as JSE sponsor, RMB was responsible for all interactions with the JSE and for ensuring full regulatory compliance at the time of listing and on an on-going basis,” said Motswagae.
With an IPO value of P1.1 billion, Choppies is now strongly positioning itself as a regional player intent on rolling out its pan African ambitions. The retailer has already announced plans to further expand its footprint beyond Botswana, South Africa and Zimbabwe to markets such as Zambia, Tanzania and Kenya. Motswagae believes the pan African agenda will benefit Botswana shareholders by increasing and diversifying Choppies’ revenue base and tapping into the growth of the rest of Africa’s growing middle income consumer base.
The RMB Botswana Country Head further revealed that the investment bank is looking to target institutions with a regional footprint that are looking to diversify their funding and institutional shareholder base as well as increase liquidity of their shares on the local stock exchange.
“We have been in discussions with Choppies for sometime about the transaction, and a key factor to consider was the timing of the listing,” said Motswagae.
She further highlighted RMB Botswana’s vision to position the business as the leading corporate and investment bank of choice, providing clients with tailored and innovative solutions. She said RMB will continue engaging with both government and the private sector to explore opportunities that will help propel Botswana forward.
“We have received positive feedback from our clients since we opened up shop in Botswana. We offer services such as: working capital finance, custodial services and trade finance, investment banking services on long-term finance of corporate and government enterprises, infrastructure finance, corporate finance advisory services and private equity,” said Motswagae. “RMB Botswana has been well received in the local financial services sector and has attracted interest from both the public and private sector. We believe that this is due to the strength of the brand which is trusted by customers across a broad spectrum of industries.”