Tanzanians will get priority over fellow East African investors in allocation of shares following the flotation of Australian oil and gas explorer Swala Energy on the Dar es Salaam Stock Exchange. Swala Energy, which is also prospecting for oil in Nyanza, started selling a stake in Swala Oil & Gas (Tanzania) Limited Monday targeting to raise between Sh83.4 million to Sh250 million from 9.6 million shares at Sh26.47 each, with the sale of shares set to run until July 4. The stringent allocation policy means that applicants from the wider East Africa risk being locked out of the IPO depending on the level of applications received from Tanzanians. This is the first upstream listing in East Africa, underlining the region’s increasing importance in the oil and gas sector. In IPO listings on the Kenyan market, companies usually specify the percentage of shares to be allotted to each category of investors. “Tanzanian applicants will be allocated offer shares in priority to all other applicants. Any other shares remaining thereafter will be allocated to East African applicants,” said the company in its prospectus. Allocation of shares to non East African applicants will only be done if all shares on offer are not taken up, the company added. Offer is conditional Further, a provision for scaling back the allocation of shares on a pro rata basis will not be applicable to Tanzanian applicants unless they oversubscribe the offer, irrespective of the level of subscriptions made by non Tanzanians. The offer is conditional on the company achieving a minimum subscription of 3.2 million shares (33 per cent), raising Sh83.4 million. There is no maximum subscription limit in the IPO for all investors, but a minimum subscription of 100 shares per person is in place. The IPO is the third in Tanzania to open up to Kenyan and regional investors after those of Mwanza Community Bank, which raised Sh146 million, and Maendeleo Bank which raised Sh216 million in October 2013. Swala Energy recently sold a 25 per cent interest in its oil block 12B located in Nyanza for $36.6 million (Sh3.16 billion) to an undisclosed investor to raise money for funding seismic surveys and drilling of two oil wells on the block.
Posted on: Tue, 10 Jun 2014 06:51:15 +0000
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