MTN Rwanda listing Soon
MTN Rwanda will be listing in May at the Rwanda Stock Exchange
Welcome to the Baobab Weekly where we bring you a succinct summary of key business news from East Africa. This week, we cover MTN Rwanda’s listing by introduction, remittance flows to Kenya, and the end of the road for Athi River Mining.
MTN Rwanda listing
MTN Rwanda has caused a buzz in Rwanda with the announcement that it is planning to list by introduction on the Rwanda Stock Exchange (RSE) next month. 1.3 billion shares will be listed at an offer price of Rwf 269.
‘’MTN Rwanda joining the RSE list of companies is a great and welcome development for our market as it increases our market capitalization. The company being of a good size adds on the number of leading brands to our Exchange and offers more visibility into the company’s operations to shareholders and the general investing public , which in turn should trigger more interest from potential new investors going forward”
Celestin Rwabukumba, CEO RSE
Here is a succinct summary of the listing:
Source: Information Memorandum
For the Information Memorandum on this listing check here. The Rwanda Stock Exchange has ten companies listed. We did a breakdown of the market on Twitter this week. Read it here.
Remittances to Kenya
Remittance continues to be a big source of external cash in Kenya as inflows to Kenya increased 27.1% to $290.8 million for the month of March 2021 [March 2020: $228.8 million]. The Central Bank of Kenya also revealed the top five remittance sources for Kenya for the month of March 2021 which were: US (55.9%), UK (11.2%), Saudi Arabia (4%), Canada (2.9%), Australia (2.9%). Across Africa, Tanzania has surpassed South Africa as Kenya’s source of remittances in Africa. Remittance inflows to Kenya have grown over the years:
End of the Road for Athi River Mining
Administrators of Athi River Mining have announced that the former cement manufacturer will transition from administration to liquidation on September 30, 2021. The company made profits totaling Ksh 8.3 billion between 2005 and 2014, but things changed from 2014 to 2017 with losses amounting to Ksh 12.1 billion. With operations in Kenya, Tanzania, Rwanda, and South Africa, it was one of the largest manufactures of cement in Eastern Africa, accounting for 2.6 metric tonnes annually in 2014.
ARM was founded by Harjivandas J. Paunrana in 1974 and had its Initial IPO in 1997 with an offer price of KES 12.25. The company’s shares were suspended from trading at the Nairobi Securities Exchange in the year 2018. Here is the journey for Athi River to the top of the mountain and back down into liquidation.
Source: Refinitiv
It was put under administration by UBA bank on August 17, 2018 after defaulting on a loan and the joint administrators were George Weru and Muniu Thoithi from PricewaterhouseCoopers. Its Kenyan business was acquired by National Cement Company Ltd (NCCL) owned by Devki Group for USD 50M in 2019. As of 2020, ARM owed creditors KES 28.4B [USD 284M] - [Kenya (USD 170M), Tanzania (USD 110M), and Rwanda (USD 4M)]. Secured creditors are estimated to recover 34-70% while unsecured creditors to recover 1.8-6.5% from the company’s assets, pending favorable tax claims from the Tanzania [USD 22M) and Kenya [USD 4.3M] Revenue Authorities.
Treasury Bonds in Kenya & Tanzania
Kenya’s Treasury has reopened the 15-year Treasury Bond [FXD2/2019/15] and floated a new 25-year Treasury Bond[FXD1/2021/25]. The amount on offer is Ksh 30 billion to offer budgetary support to the Kenyan government. In Tanzania, the government has announced the launch of a 25-year Treasury Bond with a fixed coupon of 15.95% with interest payable semi-annually and exempt from withholding tax. More here.
More 2020 results
Bamburi Cement and BOC Gases were the latest listed companies to announce their FY 2020 results this week.
Bamburi Cement:
-Revenue down 5% to Ksh 34.9 billion [2019: Ksh 36.8 billion]
- Profit after tax up 3.1X to Ksh 1.1billion [2019: Ksh 359 billion]
- EPS of Ksh 2.89 [2019: Ksh 1.74]
- Proposed dividend of Ksh 3 [2019: Nil]
BOC Gases:
-Revenues up 12.5% to Ksh 1.098 billion
- Profit after tax up 96.1% to 101.5 million
- Dividend Per Share up 82% Kshs. 4.15 [2019: Ksh 2.35]
- Cash flows from operations up 87% to 40.98 million
Other noteworthy items:
EGM Securities has been admitted onto the Nairobi Securities Exchange Derivatives market and will offer futures contracts. EGM is a non-dealing foreign exchange broker licensed by Kenya’s Capital Markets Authority.
The Kenya government will impose a 16% VAT on Liquefied Petroleum Gas (LPG) beginning July. The supply of LPG is currently zero-rated.
Family Bank has redeemed Tranche 1 of its Medium Term Programme worth Ksh 2.0188 billion. The corporate bond was issued on 26 October 2015.
Coca-Cola is planning an IPO listing in Johannesburg and Amsterdam, with Amsterdam being the primary exchange.
Millicom International Cellular has signed agreements for the sale of its operations in Tanzania (Tigo & Zantel) and for its stake in the AirtelTigo joint venture in Ghana.