Afreximbank Seeks to Tap from Investors with $300m Depositary Receipts

Obinna Chima and Ebere Nworji

The African Export-Import Bank (Afreximbank) yesterday announced the launch of its $300million equity offering, using Depositary Receipts (DRs).

Addressing journalists in Lagos wednesday, the President of Afreximbank, Dr. Benedict Oramah, said the private placement,which would last till September 22nd, 2017, would provide investors all over the world, with exposure to a truly supranational African bank involved in trade finance as well as to allow them to benefit from the growing trade opportunities between Africa and the rest of the world.

The instrument would be listed on the Stock Exchange of Mauritius.

“As part of its current strategy, the Bank is targeting to mobiliseequity of up to $1billion in the next five years from new and existing investors. The $300 million equity offering in the Republic of Mauritius is backed by the Bank’s Class ‘D’ shares. This is the first by a multilateral institution, the first to be listed on the Mauritius Stock Exchange.

“Afreximbank’s shares are currently not listed on any stock exchange. This DR issuance will therefore facilitate indirect listing of its Class ‘D’ shares and will provide investors with a liquid instrument. This DRs will provide an opportunity for the Bank to broaden its shareholder base as well as to raise additional capital.

“We want to use this market-based instrument to attract the capital that we need to develop Africa. We are here in Nigeria because we believe Nigerians should have the opportunity to take advantage of this instrument,” he added.

The Chairman of State Bank of Mauritius Group (SBM), the lead arranger of the offer, Mr. Kee Chong Li Kwong Wing, described the issue as landmark, saying the proceeds would help fill the financing gap to finance intra and inter African trade in the continent.

The SBM boss, who disclosed that the minimum investment is $30,000, said the Bank would be looking to tap from pension funds and other institutional investors in the region.

“For those who invest more than $500,000, you will have the benefit of a permanent resident in Mauritius for you and your family,” he added.

Oramah, while commenting on the Bank’s intervention in Nigeria, said over $20 billion had been disbursed in the country, saying “there is no bank that has not benefited in terms of credit line from Afreximbank.”

Furthermore, he said Afreximbank played a crucial role in supporting Nigerian bank during the period of acute foreign exchange in the country to the tune of $2 billion.

“Today loans outstanding to Nigerian firms in manufacturing, banking, etc, is about $3.5 billion.”

According to him, trade finance in Nigeria had been much easier because of the support banks in the country have countries to receive from the multilateral finance service agency.

He revealed that the Bank was financing an Oncology Centre in Abuja, which would be the best in the sub-region and improve access to healthcare, two industrial parks, as well as other developmental initiatives in Nigeria.