The Zambia Forestry and Forest Industries Corporation (ZAFFICO) Plc is planning on listing and trading on the Lusaka Stock Exchange (LuSE) on February 7, 2020, having officially opened an Initial Public Offering (IPO) of 160 million ordinary shares to the public.
According to detailed prospectus availed by sponsoring broker, Pangaea Securities Limited, ZAFFICO, the largest forestry company involved in establishing, managing and selling of exotic roundwood in Zambia, is planning on listing on the local bourse after next month, with an IPO of 160 million ordinary shares.
Details from the prospectus indicate that the ZAFFICO IPO opened last Wednesday and is expected to close on January 21, 2020, while the anticipated date of listing on the LuSE will be Friday, February 7, 2020.
“This is an initial public offering of up to 40 per cent of the shareholding of ZAFFICO, totalling to 160,000,000 Ordinary Shares of the share capital in ZAFFICO to the public, including eligible employees of ZAFFICO and selected institutional investors. Before the offer, there has been no public market for the Ordinary Shares. SEC and LuSE have approved for the registration and listing of the Ordinary Shares, respectively,” the prospectus, seen by Diggers! Tuesday, read.
“The Offer comprises: the Subscription Offer by the Company for the subscription of up to 69,996,948 Subscription Shares; and the Sale Offer by IDC of up to 90,003,052 Sale Shares. The Offer Price is ZMW2.06 per Offer Share. The Company intends to use the proceeds from the Sale of Subscription shares from this offering for general corporate purposes, including working capital, operating expenses, and capital expenditures. The expected use of net proceeds from this offering represents the Company’s intentions based upon its present plans and business conditions.”
And eligible ZAFFICO employees would be entitled to own shares in the company, but must ensure that their applications are lodged in by Tuesday, January 21.
“Eligible employees will be provided with the Share Ownership Plan and Award Notification Form containing full details and application instructions. Eligible employees who wish to participate in the Employee Offer should follow the application instructions contained within the Award Notification Form. Completed application forms should be lodged in accordance with the application instructions by no later than 17.00 hours on 21st January, 2020,” it stated.
A glance at ZAFFICO’s financial performance in the last three years between 2016-2018 shows that the parastatal, whose LuSE share code is expected to be ZFCO, has enjoyed a strong balance sheet for three successive years.
Its profit after tax rose from K79.5 million during its financial year period ending December 31, 2016, to K114.5 million and K119.6 million in the 2017 and 2018 financial years, respectively.
ZAFFICO manages 51,659 hectares of land of Pine and Eucalyptus Plantations, representing a balance sheet value for Biological Assets of K480,145,598 as of December 31, 2018.
As at the 2018 year-end, the aggregate market capitalisation of the LuSE was approximately US $5.0 billion or ZMW60.0 billion and there were 23 listed and 14 quoted companies on the bourse.
An IPO is the first sale to the public of shares in a company leading to a full stock market listing.