The African Export-Import Bank (Afreximbank) on Thursday reiterated that its $300 million offer in Depositary Receipts (DR) to private investors will boost capital for lending to industries on the continent.
The depositary receipts offer investors the same rights as normal shareholders, but issuing them does not come with the same regulatory requirements as issuance of normal shares.
Reuters quoted the bank’s Executive Vice President for Governance and Legal, George Elombi, to have said that the fresh capital would help Afreximbank to secure further funds through borrowing, to lend to investors who wish to process African commodities like cocoa growers in Ivory Coast.
“There is a need to do something about the industrial base in the continent. Otherwise we will continue to be exposed to periodic market shocks in export commodities,” Elombi told a news conference in the Kenyan capital.
“The money we are trying to raise is intended to address that particular concern.”
The continent exports most of its commodities in raw form to be processed abroad, curbing its earnings and reducing job-creation opportunities through new factories.
The Cairo-based Afreximbank, which focuses on boosting trade in and with Africa through financing, has assets of $12.46 billion, with $10.84 billion of that being loans.
It is owned by a range of shareholders including African governments and central banks.
The depositary receipts by Afreximbank, which are priced at $4.30 per unit with a minimum investment size of $30,000, are aimed at the sophisticated investor like pension funds.
Kenyan lender CBA Group is one of the transaction advisers for the deal, a representative for CBA Capital told the same news conference.
The offer is open until September 22 and they will be listed on stock exchange of Mauritius on October 4, allowing secondary trading in the depository receipts to commence.