KIGALI - Rwanda’s Initial Public Offer (IPO) was oversubscribed by 174 percent generating $80m against $29.5m projected for the 25 percent of the government shares in Bralirwa, the country’s biggest drinks manufacturer.
This was announced at a press briefing, yesterday at the Ministry of Finance and Economic Planning.
The overall IPO subscription is 274, while the number of applicants was 3,942 and Rwandans represent 79 percent of the applications.
Finance Minister, John Rwangombwa, said that the oversubscription does not mean that shares were undervalued because the company went through valuation methods.
“Three things contributed to the oversubscription; confidence in a steady economy, governance of the country and the company which has been solid for more than 50 years,” he stressed.
“There is no better company that one would be willing to invest in than Bralirwa because it is among the leading,” he said, responding to a question as to whether the government decided to sell its shares because the company was making losses.
Rwangombwa revealed that the government had 20 percent discount to motivate investors to buy into the shares but also support the immediate trading on the secondary market. After 31, January, the actual value per share will be Rwf170 against Rwf136 at which the shares was sold at.
It is said that the applications included Rwandans, citizens in EAC member states and international investors.
According to IPO application results, retail applicants from EAC partner states and foreign countries will be allocated 40 percent of the retail sub-pool of about 17 million shares.
Rwandan nationals in the retail sub –pool applied for about 26 million shares as opposed to 27 million shares that had been reserved for nationals and all Rwandans will be allotted the shares that they applied for.
All applicants that have not been allotted in full the number of shares applied for will be refunded on January 24, 2011 an amount equivalent to the value of the offer shares not allotted.
According to the allotment policy, 70 percent of the offer had been reserved for domestic investors. This includes 35 percent for retailer investors, 5 percent to employees and distributors of Bralirwa, 15 percent for institutional investors from Rwanda and 15 percent to EAC institutional investors.