The trade finance bank for Africa, African Export-Import Bank (Afreximbank) has postponed its plan to list on the London Stock Exchange two weeks after announcing it would apply for an initial public offering (IPO) to attract foreign investors that would lead to increase in trade and investment flows across the African continent.
Although the time frame for listing wasn’t announced when the IPO plan was disclosed, Afreximbank has, however, postponed the listing – which was expected to be an IPO of Global Depositary Receipts (GDRs) – despite receiving significant interest from prospective investors.
The intention to list had been encouraged by the opening up of trade across the African continent, among many other factors which were pointed out by Professor Benedict Oramah, the President of Afreximbank, during the announcement of the IPO earlier this month.
“We are excited by Africa’s trade and economic prospects, particularly as we implement the bank’s flagship initiative, the Pan-African payment and settlement system, aimed at boosting intra-regional trade.”
Why Afreximbank postponed IPO plan: According to a report, the listing was postponed due to what was described as unfavourable market conditions. However, regardless of the postponement, Afreximbank said it would still monitor the markets in order to determine the right time to list on the London Stock Exchange.
What you should know: According to the LSE, the bank intends to publish a registration document and is considering proceeding with an IPO of Global Depositary Receipts (GDRs), representing Class D ordinary shares of the bank. The GDRs are expected to be admitted to the standard listing segment of the Official List of the FCA as well as to trading on the main market LSE.
Afreximbank would permit exchangeability between the GDRs traded in London and its depositary receipts currently listed in Mauritius, which would ultimately increase effective free float.
J.P Morgan Securities Plc and HSBC Bank Plc were engaged by the bank to act as joint global coordinators and joint book runners while Exotix Partners LLP would act as co-lead manager in the event the IPO held. The Afreximbank Advisory and Capital Market Department will be acting as a financial adviser.