Comarco Group had planned to go public by Tuesday through a reverse takeover of LSE-listed Anglo Africa Agriculture (AAA) Plc.
They have, however, received lukewarm interest from investors in a development that has seen them move to extend the deal timetable beyond the initial deadline.
The companies say they will still pursue the listing of the merged entity while also being more flexible in the fundraising, including by allowing investors to buy stakes in specific assets.
Kenya’s private port operator Comarco Group has failed to attract enough international investors, delaying its bid to list on the London Stock Exchange (LSE).
The company, which owes DTB #ticker:DTK, NCBA #ticker:NCBA and I&M Bank #ticker:I&M a total of $29.1 million (Sh2.9 billion), had planned to go public by Tuesday through a reverse takeover of LSE-listed Anglo Africa Agriculture (AAA) Plc.
The two companies were to merge and simultaneously raise up to $21 million (Sh2.1 billion) from sale of shares to new investors who were approached beginning November.
They have, however, received lukewarm interest from investors in a development that has seen them move to extend the deal timetable beyond the initial deadline.
“Appetite from UK institutions was disappointing as funds at the smaller end of the market have struggled with the consequences of the demise of Woodford Investment Management, Brexit and the recently held General Election,” AAA said in a trading update. “We have seen significant interest from private equity and also strategic investors, but these groups typically do not invest directly in listed equity.”
Comarco and AAA have verbally agreed to extend the long stop date of December 31, 2019 and expect to obtain a signed extension this year.
The companies say they will still pursue the listing of the merged entity while also being more flexible in the fundraising, including by allowing investors to buy stakes in specific assets.
“The intention is thus to continue with the proposed acquisition by way of a traditional public equity raise but also consider expanded structures where private equity or strategic investors may invest in the Comarco Group assets at an asset level alongside AAA,” the company said.
The parties had warned that if the fundraising fails, Comarco’s plans to restructure the debt owed to the Kenyan banks will be uncertain and the company will be looking at paying loans of $11 million (Sh1.1 billion) within 12 months.
“In the absence of alternative funding, this would have a material impact on Comarco Group’s ability to continue to trade,” the company said.
The Mombasa-based logistics firm’s net losses widened to Sh354 million in the six months ended March compared to Sh297 million the year before. The performance was driven by higher costs and lower sales. Its turnover fell to Sh303 million from Sh353 million.
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