Zimbabwe’s capital markets recorded a landmark event yesterday as Amalgamated Brands Limited announced a US$20 million initial public offering for listing on the Victoria Falls Stock Exchange.
This will be the country’s second genuine traditional IPO by a privately held operating company since ZECO Holdings listed on the Zimbabwe Stock Exchange in 2008.
West Properties Holdings, which listed in 2023, is the only other company to list by IPO since ZECO.
Amalgamated Brands is one of Zimbabwe’s largest fast-moving consumer goods groups, comprising Cailo Foods, the manufacturing subsidiary; Cailologistics, the logistics and distribution arm and Cailo Marketing Services, which handles sales and merchandising
Its portfolio includes household names such as Spuds, Willards and Sun Jam. More than 95 percent of revenue is earned in US dollars.
The offer comprises US$5 million in new ordinary shares and US$15 million in existing shares, a base offer of 57 142.857 shares at US$0,35 per share.
The primary allocation is structured so that application monies fund the full US$5 million primary offer before any allocation to the secondary offer.
Group chief executive Mr Anele Zunga said the US$5 million primary proceeds would fund capacity expansion projects across all of the group’s main categories.
These include a new biscuit line in Harare, expected to more than double capacity; a Tetra Pak plant for Valley Pride baked beans; a soft-snacks line and new solar power generation capacity targeting 22 percent of the required site energy.
The US$15 million secondary proceeds will go to selling shareholder Takura Capital and will not accrue to the company.
Following the listing, Takura’s shareholding will fall from 98 percent to approximately 69 percent, in line with VFEX rules, with new minority shareholders expected to hold about 29 percent and Cairns employees 1,6 percent.
Board chairman Mr Washington Matsaira, an independent non-executive director, set out the group’s investment case.
“In a market like ours, availability is not a given; it is earned,” he said.
“Brands are won at the factory, where we control quality and cost, but also crucially, they are won again in the market, where the product either reaches the shelf or it does not. We have chosen to own both ends. That choice is the heart of the investment case.”
Mr Matsaira said the group manufactures everyday food and consumer brands that most Zimbabwean households already have in the cupboard, citing-herald
