Chronicle Editor
Nqobile Bhebhe
KARO Mining Holdings (KMH), a subsidiary of South Africa’s platinum producer Tharisa, has said its bond listing last December at the Victoria Falls Stock Exchange (VFEX) has raised US$36.8 million at the close of the Bond Offer Period.
When it listed on the US dollar denominated bourse, it became the first debt instrument issuer on the stock exchange.
Unlike the listing of shares, listed bonds give a company the leeway to raise significant funds without diluting equity value.
Experts define a bond as a fixed-income investment that represents a loan made by an investor to a borrower.
In a trading update, the mining firm said it has received additional subscription applications totalling US$5 million to subscribe to the bond.
“The Issuer is hereby pleased to announce that it has received additional subscription applications totalling US$5 million to subscribe to the Bond. As such, applications have been granted in full and the Notes were issued to applicants after the Issuer’s receipt of proceeds. Interest on the recently issued Notes commenced accruing from the date of issue thereof,” reads part of the notice.
“The issued Notes will be listed on the VFEX alongside the previously issued Notes that were listed on the Exchange on 16 December 2022. The Company would like to further inform Bondholders and the investing public that the Bond Offer Period has now closed.
“Following the aforementioned issuance, US$36.8 million was raised. IH Securities (Private) Limited acted as broker in relation to the placing,” it added.
All proceeds from the Bond will be applied to part fund the Karo Platinum Project — a development stage, low-cost, open-pit platinum group metals asset, located on the Great Dyke.
The project area was acquired by Karo from Zimbabwe Platinum Mines (Private) Limited (Zimplats) in March 2018 and covers 23 903 ha of land sitting just north of the Zimplats Ngezi operation.
Karo is majority owned by Tharisa PLC, an integrated PGM and chrome producer listed on main boards of LSE and JSE, with a main operating asset, Tharisa Mine, situated in the North West Province of South Africa.
VFEX is the only exchange in Africa trading in the United States dollars and was established by the Government in 2020 to attract global investment.
Karo bond listing on VFEX was critical as Zimbabwe’s bond market has not been active for some time.
Karo Mining had not listed on any bourse before although its parent company is trading both on the Johannesburg and London stock exchanges.
The company issued a US$50 million three-year bond at a semi-annual rate of 9,5 percent.
When the Government established the VFEX as a pioneering offshore financial services centre in Zimbabwe, the vision was to create an exchange that could drive the deepening and sophistication of financial systems in order to address modern day challenges of Zimbabwe and within two years the company had registered tremendous development.
Investors who participate in the VFEX benefit from the ability to move their capital and dividends in and out freely, low transaction costs, tax incentives that include a five percent dividend withholding tax for foreign investors and exemption from capital gains withholding tax for all investors and minimal currency risks. — @nqobilebhebhe.
Online Reporter