After three years of trying to get on the stock market, Crystal Telecom became the first private sector firm in Rwanda to go public after its shares were offered to the public yesterday.
The Minister for Finance and Economic Planning, Amb. Claver Gatete, unveiled the firm’s share price at Rwf105 to a house full of investors at Kigali Serena Hotel.
The announcement meant that now both Rwandans and non-Rwandans have another alternative channel to invest their savings and grow their portfolios.
According to the company prospectus, Crystal Telecom is offering more than 270.17 million shares it has in telecom firm MTN Rwanda to the public with their initial sale having started yesterday and ends on June 5.
The shares will be listed on the Rwanda Stock Exchange (RSE) for secondary market trading on July 17.
Speaking during the Initial Public Offering (IPO) launch, yesterday, Jack Kayonga, the chairperson of Crystal Ventures, the parent company of Crystal Telecom, said the offer price gives everyone an opportunity to be “a part of MTN Rwanda, a profitable business.”
The minimum number of shares per application is 1,000 shares with retail investors allocated over 67.5 million of the shares and institutional investors the remainder.
Crystal Ventures has been a shareholder in MTN Rwanda Limited since 1998, when jointly with the MTN Group Limited, they won the first licence to establish a GSM mobile network in the country.
“This listing is expected to enable several individuals and corporate firms to become shareholders in one of the leading companies in Rwanda. Naturally, we are proud to be the first private sector listing in Rwanda,” said Kayonga.
Celestin Rwabukumba, chief executive of RSE, said by Crystal Telecom doing an IPO, paved the way for other private sector firms to come to the market.
The two other local firms on the stock market, Bralirwa and Bank of Kigali, did their IPOs in 2010 and 2011, respectively, after the government decided to sell its stakes in them.
“Private companies in Rwanda need to share their growth with the public,” said Rwabukumba.
He said the coming of Crystal Telecom to the stock market is expected to significantly increase its liquidity through the turnovers and market capitalisation, which now stands at $4.1 billion (about Rwf2.9 trillion), accounting to about 56 per cent of Rwanda’s Gross Domestic Product.
“Most companies have people as their customers but they are not yet there in terms of including them in wealth creation and ownership of the big assets in this country,” Rwabukumba said.
Upon the closing of the offering and the listing of Crystal Telecom on RSE, Crystal Ventures will fully exit its 100 per cent equity interest in Crystal Telecom save for the fact that Jack Kayonga and another employee of a Crystal Ventures portfolio company, Vincent Gatete, will remain on the Board of Crystal Telecom until either or both of them resign or are replaced by Crystal Telecom shareholders.
In managing the 20 per cent stake in MTN Rwanda, Crystal Telecom will seek to transfer value in form of dividends or any other distributions received from MTN Rwanda directly to its shareholders, with less cash required to maintain Crystal Telecom’s normal operations.
The prospectus also says the dividend distribution policy will take into account the firm’s financial position and MTN Rwanda’s distribution policy.
MTN Rwanda’s financial statement for last year show its after-tax profit stood at Rwf6 billion, up from Rwf3.5 billion in 2013, almost a 70 per cent growth.
In April, MTN Rwanda paid a cash dividend amounting to Rwf10.5 billion to all its shareholders, according to their equity stake in the telecom.
This meant that Crystal Ventures received 20 per cent of the dividend payout, which included cash flow proceeds from the sale of MTN Rwanda towers to IHS Holdings last year.
Ebenezer Asante, the chief executive of MTN Rwanda, urged the public to invest in the shares given “the comfortable position MTN stands in today.”
“We are market leaders in the industry by far. MTN still commands 60 per cent of the market value. Also in terms of customer growth, we are growing by eight per cent per annum,” he said.
Asante said the company was growing in all its business lines given the large market potential in the telecom sector which should ensure potential shareholders of good dividends.
“It’s a good company and good addition to the market which will now give value to the shareholders of the minority interest, Crystal Telecom. I think its share will do well in the market,” said Lawson Naibo, Bank of Kigali’s chief operations officer.