- Private Equity-backed IPOs Rise in Africa – PwC, AVCA
The African Private Equity and Venture Capital Association and PwC Nigeria have said private equity-backed Initial Public Offerings are among the largest IPOs in Africa.
They stated this in the ‘Africa Private Equity-backed Initial Public Offering’ report, which was released on Friday in Lagos.
The report provided a historic analysis of private equity-backed and non-private equity-backed IPOs between 2010 and 2017 on exchanges throughout Africa, as well as IPOs by African companies on international exchanges.
The Head of Research, AVCA, Enitan Obasanjo-Adeleye, said it had been noted long ago that the proportion of private equity exits through IPOs in Africa was lower relative to markets such as the United States and United Kingdom.
She said the capital markets played a fundamental role in the efficient allocation of capital, describing them as a critical exit route for private equity globally.
Obasanjo-Adeleye said the report provided data, which she said would be important for ongoing dialogue around measures that needed to be taken to narrow the IPO gap between Africa and other continents.
She said, “We are excited to have worked with PwC to highlight private equity-backed IPO activity on the African continent. Over the period from 2010 to 2017, African private equity-backed IPOs, as a percentage of total African IPOs, averaged just 16 per cent in terms of volume and 23 per cent in terms of value.
“In comparison, over the same period, private equity-backed IPOs in the US averaged 39 per cent in terms of volume and 44 per cent in terms of value, and in the UK, 36 per cent in terms of volume and 45 per cent in terms of value.
“During the period under review, there have been 30 African private equity-backed IPOs raising a total of $3bn. Consistent with overall IPO trends in Africa, the Johannesburg Stock Exchange led as an exit destination in terms of value of private equity-backed IPOs, with nearly $2bn raised.”
Obasanjo-Adeleye noted that an analysis of post-IPO performance showed that private equity-backed IPOs in sub-Saharan Africa showed a price return of 27 per cent higher than their offer price.
According to her, on an average, over a one-year time horizon post-IPO, this closely approximates the performance of their non-private equity backed IPO peers of 30 per cent.
She added that the performance of North African shares over the same time horizon in the period analysed differed, with post-IPO performance returning only zero per cent and eight per cent growth over offer price for private equity floats and non-private equity floats, respectively.
A Partner, PwC Capital Markets, Johannesburg, Andrew Del Boccio, said, “Private equity funds backed a combined 16 per cent of the IPOs in Africa between 2010 and 2017, with average one-year returns on sub-Saharan Africa transactions closely in line with non-private equity IPOs.
“This suggests an opportunity to further explore the capital markets as a plausible exit strategy for private equity investments in the region. Over the period, a relatively small number of private equity-backed IPOs contributed significantly to the value of proceeds raised.
“Among others, these include the 2010 $681m IPO of Life HealthCare Group on the JSE, which constituted 23 per cent of total private equity-backed IPO capital raised between 2010 and 2017, and the 2014 $348m IPO of Alexander Forbes, also on the JSE, constituting 12 per cent of total private equity-backed IPO capital raised.”
Del Boccio stated that the $819m dual listing of Vivo Energy on the JSE and London Stock Exchange, which took place in May 2018, raised more capital than any African private equity-backed IPO since 2010.
The Associate Director, Capital Markets, PwC Nigeria, Alice Tomdio, said the Vivo Energy IPO was clear evidence that the IPO market was open to companies with attractive equity stories and a proven track record of growth.
Falcon Corporation Secures N19.41bn Debt Facility for State-of-the-Art LPG Facility in Port Harcourt
Falcon Corporation Limited, a prominent player in Nigeria’s energy sector, has successfully secured a N19.41 billion debt facility from the Chapel Hill Denham Nigeria-managed Infrastructure Debt Fund (NIDF).
The financing will be used for the development of a cutting-edge 15,000 metric ton Liquefied Petroleum Gas (LPG) storage facility and a dedicated jetty in Rumuolumeni, Saipem/Aker Base Road, Port Harcourt, Rivers State.
The Managing Director of Falcon Corporation, Prof. Joe Ezigbo, emphasized the company’s commitment to national service through investments in the gas industry.
He highlighted the strategic positioning of the LPG facility in proximity to major gas sources and navigable water routes, anticipating economic gains, job creation, income growth, health improvements, and environmental sustainability.
“We positioned our LPG facility strategically in proximity to major Gas sources and navigable water routes. The Project is set to facilitate and enhance more direct procurement and distribution of LPG, which will dramatically lower conventional delivery and storage costs,” said Prof. Joe Ezigbo.
The project has achieved significant milestones, reaching a completion rate of 65% as of October 2023. Various phases of development, including the completion of the jetty, shoreline protection, and engineering activities, have contributed to this progress.
The entire project is expected to be completed and commissioned by Q4 2024.
Falcon’s General Manager, Finance, Nelson Walter, expressed satisfaction with the partnership with NIDF, highlighting their reputation for providing reasonable terms for impactful infrastructure projects.
The flexible long-term loan repayment structure aligns with Falcon’s goals, making the collaboration instrumental in realizing this groundbreaking project.
Financial advisers Vetiva Capital Management Limited and Chapel Hill Denham Advisory, along with legal counsel Detail Commercial Solicitors, played crucial roles in facilitating this strategic debt facility for Falcon Corporation’s ambitious LPG infrastructure development in Rivers State.
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Zenith Bank Signs MOU With CFA Institute to Develop Finance and Investment Professionals
Zenith Bank Plc has signed a Memorandum of Understanding (MoU) with the Chartered Financial Analyst (CFA) Institute to promote efforts and activities that support the formation, training, and updating of human capital in finance and investment for the overall development of the Nigerian financial services sector.
The MoU, was signed by the Group Managing Director/CEO of Zenith Bank Plc, Dr. Ebenezer Onyeagwu; the President/CEO of the CFA Institute, Margaret Franklin; and the President of CFA Society Nigeria, Ibukun Oyedeji on Tuesday, November 28, 2023.
Speaking at the MoU signing ceremony, the Group Managing Director/CEO of Zenith Bank Plc, Dr. Ebenezer Onyeagwu commended the CFA Institute and the CFA Society, Nigeria for their laudable programmes in developing finance and investment professionals in Nigeria.
According to him, your Women in Investment Management Initiative, CFA Institute Research Challenge, CFA Society Nigeria Ethics Challenge and University Affiliation Program are very laudable, and Zenith Bank will continue to partner with the CFA Institute and the CFA Society Nigeria to ensure that young finance and investment professionals get the needed support for their career development.
In his words, “As a good corporate citizen, Zenith Bank remains committed to furthering the economic, cultural and social development of the society. As such, we continue to support projects and initiatives that have long-term social and economic benefits for our various publics and stakeholders. Partnering with the CFA Institute and the CFA Society Nigeria is therefore a demonstration of our commitment to building professional excellence in the finance services industry in Nigeria”.
At the CFA Institute Africa Investment Conference, during the ‘Journey to the Top: A Discourse with CEOs’ segment, Dr. Onyeagwu inspired future finance and investment professionals to uphold the highest standards of integrity.
He stressed the importance of making difficult yet high-quality decisions, building robust networks, and dedicating themselves to hard work for career success.
In his words, “as upcoming professionals, the opportunities are immense for you. Africa doesn’t get bigger than Nigeria. There is scarcity of the right kind of people that have the talent, that have the character and the leadership to provide leadership in organizations. Make a decision to be one of those, make a decision to be different. You must be driven by your passion; you must delay gratification. In Zenith what is driving us is the strive for excellence. It is not about who you are and where you come from. We have the best class of talents you can think of anywhere in the world.”
He assured the young finance and investment professionals that Zenith Bank will offer immediate employment opportunity to CFA Charter Holders and those who qualify as Chartered Accountants.
Also speaking on the MoU, the President/CEO, CFA Institute, Margaret Franklin reiterated the Institute’s commitment to the professional development of students and upcoming professionals.
In her words, “there are many things that we do for students, we invest heavily in students and why is that? Because they are our future. The mission of the CFA Institute is to lead the investment industry with the highest standards of ethics, education and professional excellence for the ultimate benefit of society and that starts with our CFA programme”.
She commended Zenith Bank for its continued support to the CFA Society Nigeria and sponsorship of the CFA Institute Research Challenge over the years.
She also commended the bank for being one of the top employers of CFA members in the country. She expressed her admiration of the culture of excellence in Zenith Bank.
Also speaking at the MoU signing ceremony, the President of CFA Society Nigeria, Ibukun Oyedeji commended Zenith Bank for its partnership with CFA Society Nigeria and its commitment to the development of young finance professionals in the country.
The the CFA Institute Africa Investment Conference is being hosted by the CFA Institute and CFA Societies from Ghana, East Africa, South Africa and Mauritius. The conference has representatives from over 20 universities in Nigeria (members of their investment clubs being supported by CFA Society).
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