Quickmart has secured applications worth Sh3.24 billion from two foreign investment firms for its Sh15 billion initial public offering (IPO), joining the UK government’s MOBILIST programme and the International Finance Corporation (IFC) as cornerstone investors in the retailer’s planned Nairobi Securities Exchange (NSE) listing.
RWC Asset Management LLP, part of the Redwheel Group, which is authorised and regulated by the UK Financial Conduct Authority and the US Securities and Exchange Commission (SEC), has applied for shares worth about Sh1.3 billion representing approximately 8.7 per cent of the shares on offer.
337 Frontier Capital LP, a US SEC-registered investment adviser established in 2016 and focused on investing in frontier African equities, excluding South Africa, has applied for shares worth Sh1.94 billion representing approximately 13 per cent of the shares on offer.
The investments will give RWC LLP about 4.3 per cent of Quickmart’s issued share capital after listing, while 337 Frontier will hold approximately 6.5 per cent.
The two investment firms join MOBILIST, a programme of the UK’s Foreign, Commonwealth and Development Office (FCDO), which has applied for shares worth Sh1.94 billion, equivalent to a 6.5 percent stake.
International Finance Corporation (IFC), the World Bank’s private-sector investment arm, is also a cornerstone investor, although its participation remains subject to approval by its board.
Cornerstone investors are institutional investors or wealthy individuals who commit to buying shares in an IPO in advance, providing an early vote of confidence that can encourage other investors to buy into the offer.
The supplementary information memorandum, approved by the Capital Markets Authority on October 23, revised the allocation among investor categories to accommodate the three additional cornerstone investors alongside the IFC.
The four investors fall under a dedicated cornerstone investor category that has been allocated 48 per cent of the two billion shares on offer, equivalent to 960 million shares worth Sh7.2 billion at the offer price of Sh7.50 per share
Kenyan and East African retail investors have an indicative allocation of 12 per cent, while Kenyan and East African institutional investors have been allocated 32 per cent. Foreign investors have an allocation of eight per cent
Quickmart is the second-largest retail chain in Kenya by store count and turnover with 72 outlets across 16 counties and an estimated 15 per cent market share.
The IPO is an offer for sale by Sokoni Retail Kenya Limited, which is selling two billion existing shares representing 50 per cent of Quickmart’s issued share capital. The offer closes on October 30, with results scheduled for November 6 and listing expected on November 12.
