Restructure gives Copperbelt Energy Corporation a major cash boost
Investment in Zambia’s power generation and telecommunications have received a major boost following a restructuring of Copperbelt Energy Corporation which has raised 387.5m kwacha (US$70 million).
Mesh Pillay, head of equity capital markets for sub-Saharan Africa at Standard Bank, said: “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.”
The transaction highlighted Standard Bank’s ability to use its on-the-ground presence and investment banking expertise across the 20 African nations in which it operates.
The 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.
Mesh said: “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.”
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: “We are delighted that 96 percent 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 more than 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.