Securities and Exchange Commission Applauds the Registration of ZAFFICO Ordinary Shares.
Press Release-SEC APPLAUNDS ZAFFICO LISTING (002)
Lusaka/January 10, 2020. The Securities and Exchange Commission (“SEC”) is pleased to announce the approval of the registration of 400,000,000 ordinary shares for the Zambia Forestry and Forest Industries Corporation (“ZAFFICO”).
The registration has enabled the undertaking of an Initial Public Offer (“IPO”) of 160,000,000 ordinary shares of the share capital in ZAFFICO to the public including eligible employees of ZAFFICO and selected institutional investors. With this IPO, ZAFFICO is seeking to raise an amount of K 329,600,000 and 56% of the proceeds of the offer will accrue to the Zambian Government as the selling shareholder and 44% of the proceeds will be used by ZAFFICO for general corporate purpose, including working capital, operating expenses and capital expenditure.
The successful subscription and eventual listing of ZAFFICO will be a major milestone in the achievement of the Government’s agenda to reduce their stake in State Owned Enterprises (SOEs) and empower citizens through share-ownership in these companies. In his speech during the official opening of the 12th National Assembly on 30th September 2016, the Republican President His Excellency, Mr. Edgar C. Lungu indicated that his government would over a 5-10-year period list State Owned Enterprises on the Lusaka Securities Exchange in order to promote citizen economic empowerment.
As regulator of the capital markets, we are confident that the Zambian capital markets are well positioned as an enabler of economic growth by providing platforms for raising long-term financing. We believe that the step taken by ZAFFICO will enable the company to accrue various benefits such as broadening of the shareholder base by attracting new investors; access to long-term financing; building long-term shareholder value and enhancing the visibility of the institution in the market place. We also see an overall improvement in the liquidity of the market as shares become available for investors to buy and/or sell.
SEC wishes to congratulate the Board and Management of ZAFFICO for coming to the markets by way of an IPO listing. Going forward, we encourage ZAFFICO to uphold its commitment to ensuring that they meet the requirements of the rules and regulations of the Securities Laws of Zambia that are meant to secure investors’ interests in the capital markets.
The SEC further wishes to take this opportunity to encourage other SOEs and companies with long term projects to look to the capital markets as their source of funding. The capital markets provide opportunities for raising finance through the issuance of shares (equity) or issuance of debt instruments such as corporate bonds.
For the investing public, you are encouraged to visit one of the transaction brokers as specified in the approved prospectus which is available on the SEC website: www.seczambia.org.zm
Phillip K. Chitalu
Chief Executive Officer