DAR ES SALAAM, July 1 (Reuters) - Tanzania’s stock exchange plans an initial public offering (IPO) of its shares within six months to improve its governance and raise funds for expansion, its chief executive said on Wednesday.
The Dar es Salaam Stock Exchange (DSE) has 22 listed companies whose total market capitalisation is 24.5 trillion shillings ($12.31 billion). It also has listed corporate and government bonds worth 4 trillion shillings.
“We expect to pick a lead transaction adviser probably within a month and the whole process of launching the IPO should take around six months to be completed,” Moremi Marwa, chief executive of the exchange told Reuters.
Like other African bourses, Tanzania’s exchange wants to encourage more firms to list or use the exchange to raise funds via corporate bonds, a potentially cheaper route than borrowing from banks where lending rates can be 18 to 30 percent.
The Nairobi Securities Exchange in neighbouring Kenya sold its shares to the public last year.
Capital raised from the sale of shares will be used in various ways including the upgrading of the bourse’s trading infrastructure, Marwa said.
The chief executive said the amount of shares to be sold would be determined at a later date.
Apart from the lead transaction adviser, the exchange has also invited bids for co-sponsoring stockbrokers, a legal adviser, reporting accountants and a lead receiving bank. The deadline for submission of bids is July 21.
Marwa said the lead adviser for the transaction would help the exchange to establish its target market, value and pricing for the IPO.
The exchange said in a statement on Wednesday it has changed into a public limited company from a mutual company limited by guarantee to pave way for the IPO.
$1 = 1,990.0000 Tanzanian shillings Reporting by Fumbuka Ng'wanakilala. Editing by Jane Merriman