Standard Bank, trading as Stanbic Bank Zambia, advised Copperbelt Energy Corporation Plc. (CEC) on the structuring of a 387.5 million kwacha (USD70 million) capital raise through a rights offer process. The success of the transaction will enable the company to expand its power and energy solutions across Zambia and the rest of Africa.
The transaction is the second-largest equity raising ever conducted in Zambia and highlights Standard Bank’s ability to use its on-the-ground presence and investment banking expertise across the 20 African countries in which it operates. Standard Bank has a long-standing relationship with CEC, Zambia’s second largest power utility, which goes back to the utility’s initial listing on the Lusaka Stock Exchange in 2008.
“There are not a lot of corporates tapping the capital markets in Zambia so this is a fairly unique transaction as well as a sign of the increasing faith that investors have in Africa’s rapidly developing equity markets,” said Mesh Pillay, head of equity capital markets for sub-Saharan Africa at Standard Bank. “The funds raised in this transaction will go a long way towards supporting CEC’s growth initiatives across Africa as well as bringing power to new areas of the continent.”
CEC plans to use part of the rights offer proceeds to re-finance its balance sheet and to fund the development of transmission infrastructure, hydro generation and renewable energy projects.
Michael Tarney, Managing Director for Corporate Development at CEC said they are delighted that 96% of CEC Plc’s existing shareholders chose to exercise their rights, providing additional equity to CEC Plc.
“The rights offer proceeds will provide additional capital to support the Company’s investments in power generation and telecommunications in Zambia, through the efforts of indigenous people and with the support of local capital markets. The Lusaka Stock Exchange has facilitated the first rights offer for CEC Plc since the Initial Public Offering (IPO) in 2008. The success recorded provides inspiration to CEC Plc to continue on its growth trajectory, with the likelihood of further rights offers in future years to raise additional capital.”
CEC’s transmission and distribution network consists of over 1,000 kilometres of overhead lines and 41 high voltage substations with a current carrying capacity of 700MW. The company’s current market capitalisation is equivalent to USD188 million.
