adminLAST week Zimbabwe hosted a delegation from the London Stock Exchange that was seeking to explore partnerships, but more importantly talk about the opportunities available for Zimbabwean firms to raise capital in London.
The meeting was both candid and insightful with Masawara’s chief executive, Mr Shingi Mutasa, whose company is one of the two local companies listed in London sharing his experience.
If ever there were any doubting Thomases that were cynical to what humanity can achieve where there is resolve, then the case of Masawara Plc is a compelling example in many ways than one.
Masawara Plc is a Jerseybased investment company in which businessman Mr Mutasa through FMI Zimbabwe Holdings Limited owns a major stake.
The firm became a test case of a listing of assets, which come after the NMBZ listing and raised US$25 million on the London junior market, AIM.
Masawara had targeted to raise US$100 million to acquire assets in Zimbabwe but complications arising from a decade of economic instability in the country made this target impossible at that time.
Since the Initial Public Offering that left FMI with a 60 percent stake in Masawara and UK multibilliondollar fund manager Invesco with 29 percent, the AIMlisted firm has already bought two assets in Zimbabwe.
It has since acquired the former assets of BP and Shell Zimbabwe and only last month bought a 50 percent stake in internet service provider Terelix.
The BP and Shell transaction should be finalised this month. Masawara contends there are no hitches in that regard.
The above brief on the achievements of Masawara tells a compelling case to local firms that no matter how huge the challenges that they face in raising capital to fund growth and retooling seem, there will always be a way out.
Masawara completed its listing in six months, but ask Mr Mutasa about the process and he will tell you it is not a walk in the park.
Listing on London’s capital markets comes with a lot of conditions and responsibilities that require character, resolve and clear vision of what one wants to achieve.
Conditions include the higher cost of listing compared to the local market, susceptibility to world economy upheavals, increased and tight disclosure requirements, strict adherence to international standards, among others.
Local firms wishing to explore capital opportunities in London will also need to secure that special dispensation from the Ministry of Finance and the Reserve Bank of Zimbabwe. So the planning must be top notch.
However, Masawara will tell you besides the stringent conditions and responsibilities that come with listing on London’s capital markets the benefits outweigh the challenges and potential losses in more ways than one.
The market, which turns over £3 billion every month and £4 trillion annually, is the largest in the world and provides a whole range of investors.
The point I am trying to drive home is that while the conditions and process of raising capital in London are arduous and stringent, the UK will provide astute planners with grand visions with a perfect platform to raise capital.
Sceptics will rush to point out issues such as the fragile economic stability and political risk profile of Zimbabwe as big stumbling blocks to raising capital in London.
Ask S. J. Berwin, the legal advisors to Masawara’s Plc’s listing on AIM, and they will consent to the notion that listing on this junior market is no mean task.
But again, they will also point out to you that if you have saleable and clearly articulated ideas, vision, know what you want to achieve and demonstrate capacity to reach your goal, London is where you need to be.
S. J. Berwin said of all listings they had handled in the last few years, including those for gambling and betting firms, Masawara’s was extremely risky.
To prove that it can be done, S. J. Berwin will tell you they have convinced sceptical investors to invest in riskier markets, such as Pakistan.
Undaunted, Masawara knew that their destiny lay in their hands and only they could make outsiders realise the untapped potential that Zimbabwe presented.
They had to fly their advisors to Zimbabwe and show them their vision and the potential benefits that could be derived from entrusting Zimbabweans with foreign money.
Following the visit all UK firms who participated in the listing and investing in Masawara supported the project with such passion many would not believe it.
Seeing the challenges local firms face in raising capital, the economic history and landscape over the last decade many have resigned to fate as far as raising fresh capital is concerned because they believe that is beyond reach.
All can be done but it requires unshakeable resolve, vision, transparency, structured and adequate planning on how to realise your goals. [email protected]
Online Reporter