UNTU Capital, yesterday listed its medium term note on the Financial Securities Exchange (Finsec) after announcing a 72 percent over-subscription of its initial public offer.
This becomes the third fixed income instrument to be listed on local securities market after the listing of Getbucks bond on the Zimbabwe Stock Exchange (ZSE) and IDBZ bonds, which listed on Finsec last year. Untu’s first tranche note issuance opened on December 04, 2017 and closed on January 26, 2018 targeting to raise $1 million with a tenure of 12 months and a fixed rate of 9 percent per annum.
Total subscriptions received amounted to $1,725 million, representing an over-subscription rate of 72 percent. Overall, the firm wants to raise $5 million with the capital raise being done in three tranches.
“We are pleased to announce that the notes issuance was a tremendous success and the company raised the target amount. As a result of the over-subscription, the directors have resolved to allot the notes as follows; the first $5 000 allotted in full plus 56,74 percent of the remaining balance applied for (and) refunds will be transferred into the bank accounts of the subscribers through Real Time Gross Settlement on or about January 30, 2018,” said company secretary Marko Mahuni.
The maturity date for the note is January 2019 following their listing on the Finsec fixed income board yesterday, which was the interest commencement date. Untu will become the third company to trade on Finsec’s Alternative Trading Platform (ATP) following IDBZ bond listing last year and Old Mutual’s listing of its empowerment shares in 2016.
Its listing coincides with capital markets developments in which investors are able to trade their shares on mobile phones, a technology that was initially rolled out by Finsec in Kenya to allow even non-smart phone users to participate.
“Untu Capital has become the first corporate to raise money on a recognized stock exchange by floating a bond where investors can subscribe by using mobile and online gadgets and paying using mobile wallets,” said Finsec. The use of technology to extend investment and savings solutions to the broader community is in line with the Reserve Bank of Zimbabwe’s initiative of financial inclusion and SECZ’s drive to promote active participation of retail investors in the capital market.
In an earlier interview, Finsec general manager Garikayi Munema, said the Untu Capital subscription which was skewed towards the retail investors showed a growing interest in the capital markets by ordinary Zimbabweans. The fixed income board was established early last year as the capital markets resumed the debt market nearly two decades after it ceased operating.
It is a platform for the listing and trading of fixed income or debt securities and helps issuers to raise capital while giving investors a regulated platform to trade debt securities. It also affords issuers brand credibility as they go through all due processes with regulators, hence ensuring investors have guaranteed returns and dividends from their investments.-newsday