April 3, 2018 / 11:38 AM / a year ago

Sagarmatha eyes $4 billion valuation in South Africa's first e-commerce IPO

JOHANNESBURG (Reuters) - Sagarmatha Technologies Ltd, a South African company that owns newspapers, online shopping and classified platforms, is targeting a valuation of more than $4 billion in Johannesburg’s first initial public offering of an e-commerce company.

Sagarmatha said it plans raise 7.5 billion rand ($636 million) in a share placement of 189.3 million shares at 39.62 rand each, it said in a pre-listing filing on its website.

Investors are to include Jim Rogers, the longtime Asian bull and co-founder of hedge fund Quantum Fund.

Rogers has agreed to buy between 100 million rand and 150 million rand worth of shares while Harold Doley, who was the U.S. representative to the African Development Bank during the 1980s and founder of U.S investment bank Doley Securities, has given a similar undertaking.

The results of the placement are to be issued later on Tuesday, it said.

The placement values the Cape Town-based company at nearly 50 billion rand, underpinned by one of the country’s largest offering of newspapers that include The Star and The Sunday Independent.

Sagarmatha will tap the Johannesburg equity market as investors and business leaders bet newly elected President Cyril Ramaphosa will follow through on promises to revitalize the economy and push through business-friendly policies.

The listing, penciled in for this Friday, would reduce the stake of top shareholder Sekunjalo Investments, a company founded by medical doctor Iqbal Surve in the 1990s, to as little as 60 percent from 73 percent.

It would also give investors an alternative to Naspers (NPNJn.J), a 1.3 trillion rand giant that owes much of that valuation to its one-third stake in China’s Tencent Holding despite running e-commerce platforms online retailer Takealot in South Africa and MakeMyTrip in India.

Sagarmatha said it would use 7.5 billion rand it hopes to raise from the sale of the 15 percent stake in the IPO to scale up its existing platforms, buy new ones, pay down debt and roll out regional offices in east Africa.

The company reported a loss before tax of 36 million rand in the 2016 fiscal year on revenue of 188.4 million rand.

Reporting by Tiisetso Motsoeneng; editing by Jason Neely

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