MALAWI – FDH Bank, a financial service provider, has announced that it will offer 1.38 billion shares at K10 (US$0.013) each through an Initial Public Offering (IPO) in anticipation of listing on the Malawi Stock Exchange (MSE) in August.
Speaking at a news conference in Blantyre during the unveiling of a pre-listing statement, FDH Bank managing director Elias Ngalande said the offer represents 20 percent stake in the bank.
He said the offer will remain open until July 17, 2020 before announcing results of the offer to the public and thereafter listing on MSE in August.
“Opportunities to invest in the financial services sector are indeed rare as the last IPO for a bank on the Malawi Stock Exchange was in June 2007 [NBS Bank], while at the same time the financial services sector remains one of the most attractive investments on the MSE,” Said Ngalande.
He said the bank’s main targeted shareholders are both individual and institutional investors and for the IPO, an investor is required to purchase a minimum of 500 shares.
The listing will enable the company to comply with contractual obligation with the Malawi Government as part of acquisition of wholly government owned Malawi Savings Bank in 2015.
The move will also help the bank to raise capital and allow existing shareholders to dispose part of their stake in the bank. FDH Bank has engaged investment and tax advisory firm EY as lead corporate advisor and Tembenu Masumbu and Company as lead advisor for the transaction.
First Discount House, Cedar Capital Limited and Reunion Insurance Company are the underwriters of the transaction.
Minority Shareholders chairperson Frank Harawa, in an interview, expressed optimism that the listing would create a wide array of securities in which investors can place their funds.
During the year-ended December 31 2019, FDH Bank—a subsidiary of FDH Financial Services Limited—posted an after-tax profit of K7.84 billion (US$10.58m), up from a profit after-tax of K5.96 billion (US$8.04m) in 2018, representing 32 percent growth while total income also grew by 18 percent from K29.066 billion (US$39.22m) to K34.389 billion (US$46.4m).
Reacting to the announcement, MSE chief executive officer John Kamanga expressed optimism, saying the listing would create a wide array of securities in which investors can place their funds.
He said the MSE and RBM are currently reviewing the bank’s submission of documents, especially the application and will advise the bank on the way forward upon completion of the review.
FDH Financial Holdings Limited is 40 percent owned by Old Mutual plc, 55 percent by M Development and five percent by employees.
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