Mozambique: Hidroeléctrica de Cahora Bassa launches public offering

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Mozambique: Hidroeléctrica de Cahora Bassa launches public offering

3:57 CAT | 20 May 2019

File photo: Lusa

Hidroeléctrica de Cahora Bassa (HCB), which operates Mozambique’s largest hydro-electricity plant, is to hold a public offering of 2.5% of the capital through 680 million actions at 3 meticais (€4 cents) each, the state-owned company announced on Monday.

This is the first selling phase of 7.5% of the HCB capital.

“The decision of the shareholders makes available to Mozambicans a superb opportunity to acquire shares of a prosperous and healthy company,” in what will be the “biggest operation in stock” ever held in Mozambique, said Pedro Couto, the chairman of the HCB administration.

The operation “will certainly give a boost in the capital market in the country” and “more important than the number, the public offering shows economic empowerment of Mozambicans,” he said.

This will be the fifth public offering of the Mozambican Stock Exchange (BVM) and will be accompanied by dissemination campaigns aimed at explaining to the public how the process works.

The subscription is to take place from 17 June to 12 July and is addressed to Mozambican citizens, which is to be held on 17 July and the next day is the settlement.

Admission to quotation is scheduled for 22 July and there is still no date for dispersion of the remaining 5% of capital to be taken to the stock exchange.

The BVM has existed for 20 years, it has eight listed companies and in the first quarter of this year, traded the equivalent of €9.8 million, reaching at the end of the period a total accumulated scholarship capitalisation of €1.262 million (about 9% of the domestic product gross of Mozambique).

The operation is to be led by a consortium consisting of the Banco Comercial e de Investimentos (BCI) and Banco BIG.

The stock market dispersion was announced on 27 November 2017 by the Mozambican president, Filipe Nyusi, during the celebration of the 10th anniversary of the reversal of hydroelectric power from Portugal to Mozambique, classifying the measure as “an act of inclusion and financial transparency.”

Located on the Zambezi River, in the province of Tete, central Mozambique, the dam is the largest in southern Africa, and it was built in 1969 and began operations from 1977.

The hydroelectric power supplies South Africa and southern Mozambique with annual production at around 13,700 gigawatts (GWh), affected by the drought of recent years in the southern region, pointing to a production target of 14,809 GWh in 2019.

HCB was one of the companies affected by Cyclone Idai, which destroyed several infrastructures and killed 603 people in the centre of Mozambique in March.

Source: Lusa