The Industrial Development Corporation has announced that there will be one initial public offering (IPO) for one of its subsidiaries before the end of 2019.
According to the 2019 Budget speech presented by the then Minister of Finance, in Q3 of 2018, IDC would seek to list two companies in 2019. The companies named were Zaffico and Zisc Life. The former’s intention was met with much public debate as various sectors counterparty to the tree processing company exposed their inadequate understanding of the mechanics of IPOs.
“As our greenfield projects proceed to operationalisation, the strategy is to progressively float our shareholding in mature subsidiaries on the securities exchange”, read an extract from the speech delivered by Acting Chairperson for Investments on the IDC Board, Geoffrey Sakulanda. “This would allow for wider public participation as well as enhance our ability to mobilise external capital for onward deployment into new elements of business value chains”.
At the the annual event hosted in Livingstone that saw the attendance of CEOs, CFOs, Company Secretaries and Board Chairpersons, the IDC provided a status update on its IPO pursuits in 2019.
“The Zambia Forestry and Forest Industries Corporation (“ZAFFICO”) will debut on the Lusaka Securities Exchange (“LuSE”) before the end of this year.” Geoffrey took this opportunity to encourage people to look forward to participating in this Initial Public Offering.
“Taking step towards listing will be ZSICLife Limited, which will be quoted on the LUSE this year”. Quoting on the LuSE is part of the initial steps for a public listing. It indicates that the company is in the process of achieving compliance.
Capital raising in tough financial times echos in the speech that was delivered. Hence it is no surprise that IDC would seek out capital markets for fund raising.
“This demonstrates the IDC’s resolve to play a leading role in deepening the domestic capital markets. A deeper local capital market is better placed to support the medium to long term objectives of the IDC portfolio compared to a continu ed dependence on the banking sector”.