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Brainworks seeks JSE listing to strengthen liquidity

13th June 2017

By: Megan van Wyngaardt

Creamer Media Contributing Editor Online

     

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Mauritius-based holding company Brainworks, which has a diversified Zimbabwe-based investment portfolio, has made a submission to the JSE to list on its main board.

The company, established in 2011, aims to be listed by the end of July.

Founder George Manyere explained in a note on Tuesday that the company wants to improve access to capital for its assets, through equity and debt. “We believe a listing on the JSE will provide the platform for us to access deeper and more liquid capital markets in South Africa, thereby affording us greater financial flexibility to grow our business.”

CEO Brett Childs told Engineering News Online that the company believed Zimbabwe was currently at an inflection point, with the country being primed for growth.

He noted that the World Bank’s recent Ease of Doing Business statistics ranked the landlocked country at 161 out of 190 countries, above Angola and Nigeria, “which investors are quite content to invest in”.

He further noted that there were certain bills before Zimbabwe’s Parliament that would enhance the business environment for investors. “Zimbabwe has instituted a credit bureau, just like in South Africa; they have eased property registration; brought in commercial courts, enhancing investor protection; and enacted regionally based special economic zones to promote growth,” Childs explained.

Brainworks’ investment interests currently comprise, among others, a 57.7% interest in African Sun, a hotel investment and management company listed on the Zimbabwe Stock Exchange (ZSE) with seven resorts and two casinos under management. Brainworks also has a 66.8% interest in Dawn Properties, a real-estate investment holding, development and property consulting services group, with a portfolio of properties valued in excess of $82-million, comprising primarily hotel assets.

The company also holds a 31.1% interest in GetBucks, a ZSE-listed deposit-taking microfinance institution; a 49% interest in GetCash, the mobile money transfer platform with a widespread, low-cost, scalable and easily accessible agent network, enabling customers to deposit cash in exchange for credit on mobile wallets; and a 100% interest in GetSure, a licensed life assurance company offering funeral cover, accident plan and savings insurance products.

“We have invested in a portfolio of assets that we believe are resilient to any hiccups and are positioned to benefit from this economic change,” he said, adding that the company invested in some ‘iconic’ assets, particularly in the hospitality sector, including the Elephant Hills hotel and the Victoria Falls hotel, in Victoria Falls.

Childs said that listing on the JSE would enable international investors to externally invest in Zimbabwe. “We are putting a structure in place that will help investors mitigate any real or perceived risks about investing here. They are able to exit without any potential issue of cash being stuck in the country,” he added.

The listing will also allow Brainworks to reduce its $37-million debt, with the company currently standing at a debt-to-equity ratio of 30:70. By year-end, Childs aims to have reduced the company’s debt to around $20-million.

“We will retire some expensive debt, which will allow us to be accretive and gives us some leverage to go after potential opportunities, using cash,” said Childs.

Brainworks’ gross assets at December 31, 2016, totalled $151-million and revenue generated from its operations amounted to $48-million.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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