PRIVATE equity fund, Brainworks Capital Management, has submitted an application to the Securities Commission for a stock exchange licence in a move meant to broaden capital markets in Zimbabwe.
Report by Our Staff Writer
If licensed, the stock exchange will be called the Harare Stock Exchange.
Brainworks MD George Manyere told a shareholders’ meeting the move was a key initiative which would deepen the local financial markets further.
SEC has in the past spoken of the need to exploit the full breadth and depth of capital markets in Zimbabwe and of finding ways to create appropriate structures and capital market instruments. The aim is to deepen and broaden markets to solve the liquidity crisis and achieve sustainable economic growth. Manyere said Brainworks would continue to broaden its investment scope and would continue to scout for opportunities in proprietary and advisory areas. “We have new business in microfinance and energy coming on stream, with significant financial muscle,” said Manyere.
Negotiations were also in progress with agriculture company Senwes South Africa over Senwes Zimbabwe, which will reduce Brainworks’ shareholding to 40%. Brainworks also has a company that is involved in exploration and development of gold deposits. Manyere said through another operating unit SRK Consulting, they were currently prospecting on 1 892ha of valid gold claims in Gweru.
Manyere said Brainworks was targeting an investment rate of return of 30% over a period of between three to five years and should hold at least 25,1% shareholding in investee companies “so that we have influence over special resolutions.” To date, the company has invested about US$20 million. It raised US$5 million in acquisition finance and had raised US$12 million through private placements. Manyere said that athough Brainworks was not yet listed, the company had been proactive in dealing with the prospects of an initial public offering and had created structures that would facilitate the achievement of a successful IPO in the future. Manyere said the company would issue 120 million shares as pre-IPO offer, with an expected price range of US7-8c and a medium-term price target of US10-12c. They were targeting a minimum valuation of US$50 million which they should achieve by 2015. The company had also received an indigenisation compliance certificate.
Brainworks is an investment holding company focusing on banking, insurance and the mining & fuel sectors. It is also a major shareholder in banking group Ecobank following a share swap with the African Development Corporation late last year. The company is backed by the largest Zimbabwean pension funds under Comarton Consultants.