MBEA’s loss of an operating licence in Uganda will not affect procedures to prepare Rwanda’s first Initial Public Offering (IPO) officials have said.
MBEA brokerage services Uganda, is part of the consortium made of other brokerage agencies from the region, which won the bid to offer service as, the lead transaction advisers during the preparation of the BRALIRWA IPO set for later this year.
BRALIRWA is the country’s top brewery company which also manufactures Coca Cola products.
According to press reports, information attributed to Uganda’s Capital Markets Authority (CMA) indicated that on Wednesday, MBEA’s license was not renewed for the coming year, “due to the inability of the entity to meet its minimum net capital requirements”.
MBEA’s clients in Uganda will now have to do business with Crested Stocks Securities with immediate effect because the agency has allegedly not met the stock market’s regulators licensing criteria for the coming year.
However, according to the Capital Market Advisory Council (CMAC) which regulates bourse in Rwanda, the de-licensing of one of the oldest players in Uganda’s market was due to capitalization issues which are independent from the advisory services they will offer for the BRALIRWA IPO.
“The denial of the license would have affected BRALIRWA’s IPO only if it was a result of bad business conduct which is not the case,” said Robert Mathu the Executive Director of CMAC.
He also said that MBEA still has its assets that it can use to recapitalize their business and add more capital to their business and the firm’s client’s funds are still safe.
Before de-licensing the brokerage firm, Uganda Capital Market Authority through the regional Memorandum of Understanding among the market regulators where information is shared, discussed the issue with CMAC.
However the regulators in Uganda say that they have not suspended the firm as they can always come back for the renewal of the license once they have sorted out their capital problems.