Micro-financier GetBucks Zimbabwe plans to list on the Zimbabwe Stock Exchange on January 15 next year after launching its bid to raise $3.2 million in an initial public offering (IPO), three years since it began operations in the country.
The IPO is the first since the Philip Chiyangwa-owned engineering ZECO Holdings listed in 2007 — during the Zimbabwe dollar era — although the company has struggled since.
Mauritius registered GetBucks Limited owns 55 percent shareholding of the local unit while Zimbabwean investment firm, Brainworks owns 34.06 percent, with the remainder held by various shareholders, including pension funds and insurance firms.
GetBucks is one of the two micro-finance institutions to be granted a deposit taking licence by the central bank in July this year.
The offer opened on December 7 and will close on January 8. Of the amount being sought, $2.9 million will be for working capital with $300 000 paying for costs associated with the IPO and listing. The company is offering 93 567 251 shares at a subscription price of 3.42 cents per share.
Analysts who attended a briefing yesterday noted that the float offered in the IPO amounted to about 8.5 percent of GetBucks’ total issued share capital, raising questions about the shares’ liquidity.
Brainworks chief executive George Manyere said GetBucks would consider issuing more shares in the future but added that other companies should come on board to improve investment alternatives on the ZSE, adding that none of the current major shareholders wanted to sell-off.
“We are not cashing out, none of the founding shareholders are. We believe that there is a lot more value going into the future and we are committed for the long-term,” said Manyere.
GetBucks Zimbabwe managing director Walter Kambwanji said the micro-finance sector loans had averaged $160 million annually since 2013 and had potential to grow further.
“We think there is scope to grow the sector even more. What we see in our business is that there is high demand for salary based loans but because industry has not been performing, the informal businesses are also growing and they would need access to banking and financial products,” Kambwanji told analysts at the briefing.
“We think the listing will increase the visibility of the GetBucks brand to both the public and private sectors leading to new business opportunities. We also wish to attract focused and permanent capital through the IPO and ability to raise cheaper finance.”
The listing would also help the company comply with new ownership requirements of a deposit-taking institution where Brainworks — as a non-financial company as defined by the Reserve Bank — cannot hold more than 25 percent shareholding.
It has 20 000 customers with 13 branches in major centres in Zimbabwe. Its loan book stands at $11.6 million with the non-performing portion of that at two percent, much lower than the 15 percent in the banking sector.
“It’s a profitable business that has demonstrated remarkable growth in the three years that we have run it. It’s a dividend-paying company and cumulative dividends so far dished out to shareholders is $2 million,” said Kambwanji.
The company also runs a successful promissory programme with pension funds. The promissory notes attract 15 percent interest per annum and Kambwanji said there remains huge interest in the programme.
Chief finance officer Paul Soko told the briefing that the company had targeted to pay 25 percent of profits to shareholders because ‘this is a very profitable company.”
In the full-year to June, GetBucks reported a $6 million profit before tax from $2.3 million the previous year. In 2013, the company made a loss of $183 000.
Manyere said the company was at the right stage of development to list.
“In our view, given the stage of development of this company and the prospects that it offers in the future, we are very confident that this is the perfect time for us to come into the market,” he said.
“Any delays we will be talking of a business that will be two to three times bigger than this and it will be much more difficult to embrace more shareholders and make sure that they ride the journey of creating value with you.”
Mercy Murevesi, who has worked for the central bank and Ecobank, will take over as managing director at the end of January next year, replacing Kambwanji, who is also Brainworks’ chief finance officer.- The Source