By Ayobami Adedinni
In its aim to further expand Africa’s growth initiative through better funding opportunities, The African Export-Import Bank (Afreximbank) is inaugurating a $300 million equity offering, using Depositary Receipts backed by its Class “D” shares.
Speaking with stakeholders and finance Journalists in Lagos last week, President, Afreximbank, Benedict Oramah, said the institution, through the $300m issuance of Depositary Receipts, is opening its shareholding to the investing public.
According to him, Depositary Receipts issuance is aimed at enhancing its capitalization in order to significantly narrow the trade financing gap in Africa, currently estimated at $120 billion annually, and to meet its strategic objective of growing intra-African trade in all regions of the continent, including island economies.
The Depositary Receipts issuance represents an opportunity for Afreximbank to diversify its shareholder base by enabling investors in Africa and beyond, who have not yet invested in the Bank, to do so and to strengthen Africa’s premier trade finance institution, whose interventions in its various member countries have created acknowledged development impacts across the continent, he said.
Being a novel issuance in Africa, Afreximbank’s Depositary Receipts are expected to further deepen Africa’s equity capital markets, paving the way for similar issuances by other multilaterals.
Chairman of SBM Holdings Ltd, Kee Chong Li Kwong Wing, said, “It is a privilege for SBM to have been entrusted by Afreximbank to execute such an important transaction. The structuring and issuance of Depositary Receipts is an addition to the Group’s portfolio of services, a recognition of our competence and experience, and it reinforces the position of SBM Group and Mauritius as important financial players in the region. It is high time to see Global investors investing in Africa and tap into Africa’s huge potential.”
“This initiative is an innovation for the financial market,” said Li. “This African ‘Premier’ shall be a model to other countries and finance institutions. Together, Afreximbank and SBM Group are creating opportunities for the reinforcement of trade, investment and development across the African continent and the deepening Africa’s capital markets.” Afreximbank’s shareholders are a four-tier mix of public and private entities, with Class “A”, constituted of African states, African central banks and African public institutions; Class “B”, made up of African finance institutions and African private investors; Class “C”, with shares held by non-African investors, mostly international banks and export credit agencies; and Class “D”, under which fully paid shares can be held by any investor.
Afreximbank’s intervention plans included the promotion of local value addition in the agriculture and forestry sectors, increasing the country’s power production capacity to support industrial development, unlocking the mining industry’s potential, accelerating the country’s digitisation drive, developing the tourism, transport and logistics infrastructure, and providing support to increase access to finance for small and medium enterprises, stated Awambeng