The cause for the delay of the long awaited Initial Public Offer (IPO) for Rwanda’s leading beer and soft drinks manufacturer and distributor has been attributed to the just concluded presidential elections. It was expected that the government that owns 30 percent shares in the brewery would offload them to the public early this year but it was not to happen. “The IPO will take place before the end of this year but the delay was caused by the government time table that is the budget process and elections,” said Vincent Munyeshyaka the Chairman of the Capital Market Privatization Committee (CMPC), the body that oversees and coordinates the process of divesture through the capital markets on behalf of government. The government is also yet to reveal the price at which a share will trade with Munyeshyaka saying that “it is yet to be determined, with the business valuation ongoing but it will definitely be out before the offer opens,” However, market analysts say that government is likely to offer its shares at a discount in order allow high public participation of uninformed local investors as well as boosting the nascent stock exchange. The government will sell 25 per cent to the public while the remaining five per cent will be purchased directly by Heineken Group, which owns the majority 70 per cent shares. The government believes that with the development of the capital markets, the companies in which government has a stake will have to go public in order to provide a platform for corporate governance and this falls and the government privatization strategy. Munyeshyaka also reiterated that the development of the capital market will make Rwandan economy more competitive in terms of lower cost of capital in the medium term to long term. However, ahead of the IPO, he noted the main challenges as the legal framework as well as the lack of enough public education awareness. The government has also expressed interest in off-loading its shares in three of the country’s biggest companies — the other two being MTN Rwanda and Sonarwa, an insurance company. Ends
