Blow to London IPOs as African Export-Import Bank puts float on ice

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By Vernon Wessels and Swetha Gopinath

Cairo-based lender says it will watch markets for improvement
JPMorgan, HSBC, Exotix appointed as advisers for GDR issuance

African Export-Import Bank postponed its London initial public offering as volatile markets and uncertainty around Brexit added to a downturn in listings in the U.K. capital.

“Despite significant interest in the bank from investors, in light of unfavorable market conditions, it has decided to postpone the proposed initial public offering at this time,” the Cairo-based lender said in a statement Tuesday. “The bank will continue to monitor the markets to find the appropriate window to launch its offering.”

The sale is the third to be pulled this month in London. Kazakh fintech company Kaspi.kz, which is backed by Goldman Sachs Group Inc., and Interswitch Ltd., a Nigerian-based payments business, both pushed back their planned floats, also citing difficult market conditions.

The IPO market across Europe is no better, with companies such as Ferretti SpA, the Italian superyacht maker partially owned by the Ferrari family, and German computer hardware firm Congatec AG, among others suspending their planned listings

Spooked by a widening disconnect between buyers’ and sellers’ expectations and given an abundance of capital in private markets, fewer companies are going public across the continent. With Brexit thrown into the mix, the IPO market in the U.K. has been particularly bleak, even as stock indexes look set to have a decent year.

About $22.8 billion has been raised on European exchanges by 107 companies this year, roughly half the volume in the same period last year, according to data compiled by Bloomberg. In the U.K., the drop is even worse: Only 23 companies have made trading debuts this year, a third of last year’s tally. Deal value has held up a little better, falling by more than a quarter to $7.9 billion.

Afreximbank planned to use the funds to help finance rapidly increasing trade flows on the continent. The lender, which operates in 51 of Africa’s 55 countries, has provided about $69 billion of trade-financing support since starting in 1993.
Mauritius Listing

JPMorgan Chase & Co. and HSBC Holdings Plc were hired as joint global coordinators and bookrunners for the issuance of global depositary receipts, while Exotix Partners LLP was picked as co-lead manager.

While Afreximbank didn’t indicate a post-IPO valuation, the bank reported total equity of $2.7 billion in an investor update last month. The company listed on the Stock Exchange of Mauritius in 2017 via a private placement of depositary receipts, giving it a market value now of $2.1 billion.

Afreximbank has four classes of shareholders ranging from African governments and central banks to lenders such as Standard Chartered Plc and private investors tied to the continent, according to its website.

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