The African Export-Import Bank (Afreximbank) has explained that its $300 million offer in depositary receipts to private investors is expected to boost capital for lending to industries on the continent.
The depositary receipts offer investors the same rights as normal shareholders, but issuing them does not come with the same regulatory requirements for issuance of normal shares, ThisDay reported.
The Bank’s Executive Vice President for Governance and Legal, George Elombi, noted that the fresh capital would help Afreximbank to secure further funds through borrowing, to lend to investors who wish to process African commodities like cocoa growers in Ivory Coast.
“There is a need to do something about the industrial base in the continent. Otherwise, we will continue to be exposed to periodic market shocks in export commodities,” Elombi told a news conference in the Kenyan capital.
“The money we are trying to raise is intended to address that particular concern.”
The continent exports most of its commodities in raw form to be processed abroad, curbing its earnings and reducing job-creation opportunities through new factories.
The Cairo-based Afreximbank, which focuses on boosting trade in and with Africa through financing, has assets of $12.46 billion, with $10.84 billion of that being loans.
It is owned by a range of shareholders including African governments and central banks.
The depositary receipts by Afreximbank, which are priced at $4.30 per unit with a minimum investment size of $30,000, are aimed at the sophisticated investor like pension funds.
Source: Footprint to Africa