FINACorp manages one of the largest IPO transactions in North Africa
Global Investment House "Global" announced today that FINACorp, Global's financial services subsidiary company carried out the largest IPO for ARTES a car dealership distribution group in Tunisia, North Africa.
FINACorp managed the transaction to place 39.6% of ARTES capital for a value of approximately US$ 90 million, 9.42% of which as a Private Placement and 30.18% as a public placement in the form of an Underwritten Placement and an IPO, making it the largest IPO in the history of Tunisia. The public placement occurred during the period which commenced on the 17th of March, 2008 and closed on Friday March 28th, 2008 during which FINACorp succeeded to have it oversubscribed for approximately 9.2 times or more, pending official results to be announced soon.
Mr. Moncef Mzabi Chairman and CEO at ARTES said, “The high demand for the shares of ARTES was evident in consumer and investors’ interest in this unique product since subscriptions exceeded the targeted amount.”
He stressed that closing the transaction is an achievement since it’s the first largest IPO distribution in the last 10 years in Tunisia and one of the largest in North Africa recent history. ARTES capitalization upon IPO stands around US$ 230 million. He continued that the Tunisian car market will experience some structural changes with the entry effect of the free trade agreement Tunisia signed with the European Union which will hopefully witness a 50% growth over the next few years.
FINACorp, Global's subsidiary in Tunisia acted as the advisor to the owners of ARTES, the Mzabi Family Group, one of Tunisia’s and North Africa’s leading business groups and managed the IPO subscription for ARTES a distribution company for two major international car brands Renault and Nissan enjoying a leading position in the automobile distribution sector in Tunisia.
The underwritten placement was led by FINACorp which associated BNA Capitaux a brokerage subsidiary of Banque Nationale Agricole, one of Tunisa’s largest commercial banks.
An initial private placement of 9.42% of ARTES capital has been sold to foreign strategic investors. Through sale of 7,695,900 shares at a fixed price of TND 10.330 per share, another 30.18% of ARTES capital will be traded on the Tunis Stock Exchange starting this month.
On the other side Mr. Khaled Ait Khalifa Vice Chairman at FINACorp stressed that the shares’ sale was divided into two parts, the Underwritten one representing 14% of ARTES capital was dedicated to foreign strategic investors and the IPO part divided into seven tranches also appealed to foreign institutions for tranche A and D. Tranche A of 765,000 shares represents an allocation of 3% of ARTES shares and applies to candidates willing to subscribe to a minimum of 120,001 shares and a maximum of 765,000 shares.
Whereas, Tranche D with 912,900 shares offered represents an overall allocation of 3.58% of ARTES capital and can be subscribed by foreign companies and investors willing to buy a minimum of 10,000 shares offered and a maximum of 127500 shares Ait Khalifa ended.
The private placement and underwritten placement intended to international investors are subjected to a lock of period of 9 months from the first day of listing.
It is worth noting that with US$ 230 million in size ARTES is the largest capitalization initiated on the Stock Exchange since 10 years, a market capitalization close to that of Société Tunisienne de Banque (STB) or Attijari Bank.
Mr. Khaled Ait Khalifa pointed out that ARTES IPO, owing to the unprecedented size and oversubscription of the shares’ offer, may signal a turning point for Tunis Stock Exchange. One should expect more IPOs to come on stream and as a result a take off of Tunis Stock Exchange to become a recognized financial market.
Established in 1997 following the take-over of Renault Tunisie, by MZABI Group, ARTES suited into a local dealership of Renault and Nissan brands, offering spare parts, new cars, and technical assistance to customers in the region.
ARTES should report consolidated sales of approximately US$ 140 million for 2007 and a net profit of approximately US$ 19-20 million. ARTES is cash rich (approximately US$ 70 million) and no bank debt.
Subscribers to the IPO will benefit from ARTES 2007 dividends as the company has decided to distribute TND 20 million in the next few months (US$ 17 million) representing a yield on the IPO price of approximately 7.6%.
Mr. Khaled Ait Khalifa emphasized that ARTES has an excellent market position in the region, given that it dominates 27% of the Tunisian automotive market and has managed to maintain a leadership position in the local market for six consecutive years. Further Nissan brand was introduced only recently (two years ago) and bears potential for more growth in ARTES sales and margins.
That is why Mr. Moncef Mzabi, CEO and mastermind of ARTES success has pledged to sustain a high pay out in dividends over the next years (80%) and expects 2008 to be in line or better than initially highlighted in the IPO Prospectus.
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