Zambias largest forestry company ZAFFICO (ISIN0000000524) is making a capital markets debut for the Kwacha equivalent of $23 million. The long awaited initial purchase offer opened on 11 December with 160 million of ordinary shares on offer for K2.06 a unit as the State Owned Enterprise (SOE) seeks to raise K329 million in offloading 40% government stake on the Lusaka Securities Exchange (LuSE).
ZAFFICO’s total asset size measures K756 million of which 63% represents biological assets in forest area measuring 51,659 hectares comprising exotic and hard wood tree species.
The IPO is expected to run for 6 weeks to the 21 January 2020 and will make a debut listing on the Lusaka bourse 07 February. The long awaited listing is evidence of actualization of the states intent to raise funds and allow for SOEs to operate profitably. This way the government will not only be eased of pressure on the fiscals through capitalizing ailing SOEs but will enjoy a stream of cash flow dividends in future earnings. The listing will also deepen Zambian capital markets after a long period of inactivity and will push the listings to 24.
The prospectus highlights some of the key risks the Zambian macroeconomic environment faces such as currency, political and regulatory risks.
Pangea Securities are Lead advisors on the transaction while Deloitte are the company’s auditors.
Other listings earmarked for 1Q20 include Zambia State Insurance Corporation (ZSIC) and Hotel Special Purpose Vehicle (SPV) for NAPSA.
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