Brainworks pioneers JSE main bourse listing….Set to acquire new hotel, horticulture businesses….Seeks to raise $15 million
Taurai Mangudhla recently in JOHANNESBURG, South Africa
Brainworks Limited on Friday broke new ground after it became the first Zimbabwean company to have a primary listing on the Johannesburg Stock Exchange. Brainworks has subsidiaries in real estate (Dawn Properties), hospitality (African Sun), logistics (FML) and financial services (GetSure, GetBucks and GetCash). It is the 16th company to list on the JSE this year.
The kudu horn was blown early Friday morning to signal Brainwork’s listing at a colourful ceremony held at the JSE. The shares opened at R11.50. The anticipated market capitalisation of the company is around R869.7million. The listing is seen expanding the company’s capital base and supporting its vision for growth and expansion into regional and global markets. CEO Bretts Child told the Herald Business in Johannesburg on Friday that the company targets raising $10 million in the first 12 months of trading.
“With regards to capital, we are looking to raise about $15 million in the first year which will be used to fund various operations and to retire debt obligations. But we are really hoping to use our equity to raise more capital in Zimbabwe also,” he said after the listing ceremony.
The company immediately announced plans to acquire a new hotel business and move into horticulture. Zimbabwe Ambassador to South Arica Isaac Moyo said Brainworks was pioneering the Zimbabwean dream to have its businesses spread into the world.
“Today we are welcoming them into the new territory and I am optimistic they will make it and we expect more Zimbabwean businesses or those with a strong footprint in our country to do the same” Ambassador Moyo said.
Regional stock market analyst and FNB head of research Chantal Marx said Brainworks is expected to raise “a huge amount” of capital and reap benefits from the general excitement around new stocks on the bourse.
“The reason why they are listing is obviously to gain access to more equity and also market themselves to debt providers. This is their debut in the most liquid market in Africa and the expectation is that it gives them a boost to reputation and credibility. When this becomes a success, other Zimbabwean companies are expected to follow suit and we may perhaps see dual listings. In South Africa there is a very deep pool of capital and people are always interested in new listings and new companies have been very successful,” Miss Marx said.
Donna Nemer, Director Capital Markets at the JSE, said: “As Africa’s largest stock exchange, the JSE believes we can make an important contribution to the growth and the development of our continent. We do this through offering foreign investors a secure and transparent entry point into Africa and providing the companies who do business here with a liquid platform to raise further capital to fund their expansion.”
Brainworks is also working on a facility with the Reserve Bank of Zimbabwe, which will allow Zimbabwean investors to buy shares of the company without the need to source foreign currency. When it was established in 2011, Brainworks was owned 100 percent by George Manyere and Walter Kambwanji, but the shareholding shifted in 2012 and now foreigners own over 65 percent of the company. The group says that its main investment case lies in the fact that it offers ground floor access to a recovering emerging market and through the planned listing provides exposure to Zimbabwe based assets without risks associated with direct investment through the ZSE.