Afrexim plans secondary listing of depository receipts

The African Export Import Bank (Afreximbank) plans a secondary listing of its depositary receipts to diversify its shareholder base and add more private investors in its register.

The Cairo-headquartered pan African trade financier is working with advisers on the listing but its President Benedict Oramah did not provide timelines or market.

“Prof Oramah announced that the Bank was planning a secondary listing of its depositary receipts in order to improve liquidity and access to diversified investor base,” the bank said.

“It had also explored alternative sources of funding the balance sheet and deployed excess cash holdings to finance loans with better interest margins.”

Afreximbank August last year opened its shareholding to Kenyan investors after it launched a $300 million (about Sh31.1 billion) equity offering on the Mauritian Stock Exchange, using depositary receipts backed by its Class “D” shares.

Through the issue of the depositary receipts, the lender opened up shareholding to the public who would own class D shares. Depositary receipts are instruments through which companies raise equity capital in other jurisdictions without physical listing the shares on an exchange in the jurisdiction.

The African Export-Import Bank had earlier said it plans to sell shares worth as much as $1 billion (about Sh102.6 billion) through issue of fresh receipts including in Nigeria over the next five years in order to diversify its shareholders’ register.

The lender has raised more than $3 billion (about Sh307.8 billion) as of 2016 to fund its activities, with about $1 billion coming from Eurobonds, far short of the continent’s soaring demand for financing for African economies hurt by lower commodities price.

Afreximbank was founded by African governments and other investors in 1993.