By Steven Godfrey Mkweteza
The country’s leading commercial bank and authorized dealer for exchange control purposes, First discount bank(FDH) bank plc limited has opened the initial public offer(IPO) that will see shareholders constitute 20% of the ordinary share capital of the bank.
In its IPO pre-listing statement made available to the media in Blantyre, the bank says it offer for sale of 979,175,000 ordinary shares and offer for subscription of 401,031,250 ordinary shares each at an offer price of MK10, 00 per share.
The concept indicates that the admission to trade on the Malawi stock exchange with effect from the commencement of trading on August, 3, 2020 as the listing date.
It further indicates that the initial public offer of 13,802,062,500 in the ordinary share capital.
Speaking in an interview, the bank’s managing director Elias Ngalande said the move was to fulfill the contractual obligation with the government, as part of the acquisition, to list the bank and allow the government of Malawi to dispose of its entire shareholding in the bank.
Ngalande added that the development was also intended to raise capital to support future growth of the bank, share trading exchange as well as to allow existing shareholders to dispose part of their shareholding in the bank.
“We agreed with government when we were acquiring share in the Malawi savings bank that when business picked up, there should be an exit strategy. So this is one way of exiting government shares from the bank,
“This is to enhance financial inclusion equity stake of the general public and other stakeholders. This will also enhance the sharing of ideas from the shareholders for the growth of their investments,” said Ngalande.
Ngalande said the IPO, which will run up to May 17, 2020, will see the Malawians acquiring an approximate of 1.4 Billion shares.
He said each applicant must subscribe in multiples of 100 shares with a minimum application of 500 shares, adding that there was no maximum number of shares or maximum subscription amount that can be applied for by applicants.
Ngalande said the expenses of the listing fees will be paid out of the proceeds of the offer.
According to him, the bank will soon bring on the market the share ownership loan scheme of up to MK10 million for the prospective shareholders to use in buying the shares.
On the other hand, the managing director urged the prospective shareholders to invest in the financial sector as, he said, remained one of the conducive areas for share market and not volatile to economic shocks such as covid-19 pandemic.
In March this year, the bank, which has 27 branches across the country, acquired the entire equity of MSB properties limited (MSBP). The Bank also successfully acquired and integrated the loss-making government owned Malawi savings bank (MSB) in 2015 on contractual period agreement.
The bank was incorporated in Blantyre in May 2007 as a private liability company before it was re-registered as a public limited liability under the companies Act, 2013 in June 2020.
