Nimbus a first for NSX

Capital pool company debuts

09 October 2017 | Sakenuus
Jo-Maré Duddy – Nimbus Infrastructure Ltd made its debut on the local index of the Namibian Stock Exchange (NSX) as the country first capital pool company (CPC) on Friday.

Its listing follows a week after Letshego Holdings Namibia also entered the NSX, breaking a dry spell of listings on the local index.

A CPC is a capital raising structure that is relatively commonly utilised in North America and more recently, South Africa. It allows for capital raising and co-investment by various institutional and individual investors in order to seek and develop potential investments, Nimbus said.

The initial capital raising resulted in about N$102.7 million raised from institutions and retail investors. Institutional investors account for N$81.395 million, while retail’s share is N$12.87 million. Paratus Namibia invested N$5.1 million, while its employees invested N$3.265 million.

The capital is earmarked for investment in information communication technology (ICT) projects and institutions in Sub-Saharan Africa. Nimbus is currently looking at a number of potential transactions and as per the stock exchange rules, aims to take these transactions forward for shareholder approval before the end of the year, the company says.

The listing of Nimbus was a joint initiative between Cirrus Capital, Paratus Namibia and Cronje & Company.

Nimbus says its listing “boasts exciting opportunities for Namibia”.

Not only does it focus on the fast-growing ICT sector across the continent, but it offers a strong diversification opportunity for the funds of institutions and individuals alike. It allows for diversified jurisdiction, currency and sector returns for investors.

“Further to this, as Namibia’s first CPC, Nimbus represents an opportunity to prove a new concept that will likely form a critical part of the future development of the Namibian real and financial sectors,” the company says.

Asset requirements

Part of Nimbus’ rationale for listing is the proposed increase in local asset requirement for Namibian pension funds and life insurance companies. The government intends increasing the minimum local assets holdings requirement from the current level of 35% to 45% by October 2018.

“Therefore, the introduction of new listed equity, particularly in a sector for which no listed equity exists, will help to provide additional investment opportunities and sector diversification for contractual savings,” Nimbus said in its pre-listing statement published on the NSX.

Nimbus says Africa is lagging behind much of the rest of the world, with internet penetration rates, on average, around one-third of what one sees in the developed world.

“In this regard, most African countries have internet penetration rates of under 30% (Namibia is at approximately 31%), with countries such as the Democratic Republic of the Congo having an internet penetration rate of approximately 4% of the population. World Bank studies have shown that access to the internet has a strong positive correlation with growth, resulting in wealth and job creation, and poverty and inequality reduction.

“It is against this backdrop that Nimbus has been established to identify opportunities and acquire viable assets located in Sub-Saharan Africa. In this regard, while no commercial terms have yet been discussed nor agreed upon, the initiating parties have identified a number of potentially viable assets, which meet the acquisition criteria for viable assets,” the company says.

Nimbus has signed a management agreement with Paratus Namibia, whereby the investments made by Nimbus will be managed by Paratus.

The Nimbus board of directors are Schalk Erasmus (chief executive officer), Stefan de Bruin (chief financial officer), Romé Mostert (chief investment officer), Hand-Bruno Gerdes, Brown Amuenje, Stuart Birch, Josephine Shikongo, and Christoph Stork.

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