Brainworks raises $8,1 m from shares disposal

Brainworks Limited has raised $8 179 808 following the placement of 9 078 677 Treasury shares to investors, a move which gives them an opportunity to own shares in the Johannesburg Stock Exchange (JSE)-listed entity.

BY NDAMU SANDU

Last week, the Mauritius-registered company announced that it was offering locals an opportunity to buy 10 680 555 shares. The company was holding the shares after buying them from businessman Shingi Munyeza, when he exited the group in 2015.

In a recent notice, Brainworks said the placement of 9 078 677 shares was done at a price of $0,90 per share.

“The relevant shares will be transferred to investors on receipt of the necessary approval from the Reserve Bank of Zimbabwe. The company will have 1 601 879 shares in treasury after the placement,” Brainworks said.

The transaction was handled by ABC Stockbrokers with Brainworks’ unit, Brainworks Capital Management (BCM) saying last week that it would apply for central bank approval on behalf of successful purchasers for them to hold assets outside Zimbabwe.

BCM said it was also prepared to assist Zimbabwean purchasers in facilitating payment of the 0,25% Securities Transfer Tax to the South African Revenue Service.

Brainworks has a diversified Zimbabwean investment portfolio with a 57,7% interest in African Sun, 66,6% stake in real estate company, Dawn Properties, and 31,1% holding in Zimbabwe Stock Exchange-listed microfinancier, Getbucks. It has 49% shareholding in mobile money transfer, GetCash and wholly-owns insurance firm, GetSure.

In a note to investors, ABC Stockbrokers said it was a big leverage to be listed on the JSE which, in a way, insulated the company from a wide deviation in valuations that usually stalk illiquid markets.

“This is a strong capability statement by the company in attaining this milestone given the onerous compliance checks at the JSE which comes with a “big boy club tag”. This is happening at a time when appetite for investment companies on the JSE is on a bullish trend and may underscore early pickings for investors through capital appreciation in the near term,” the firm said.

The brokerage company said the granting of exchange approval by RBZ would provide Zimbabwean investors with an opportunity to diversify portfolios into a highly liquid market.

“Faced with a runaway market in Zimbabwe, this opportunity may be a better option to start with, at its inception,” ABC Stockbrokers said.

In its six months ended June 30 financial results, the investment holding company widened its loss to
$5,2 million on rising expenses despite a 23% growth in revenue.

Revenue was up at $24,2 million in the six months ended June 30 from $19,67 million realised in the comparable period last year. Expenses were up to $19,98 million from $16,28 million in the comparable period last year.

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