Brainworks Limited, which became the first Zimbabwean company to have a primary listing on the Johannesburg Stock Exchange in October 2017 is planning to raise approximately $7 million by issuing more shares, Business Weekly has learnt.
According to sources privy to the latest developments the funds will be used to strengthen the company’s property and hospitality businesses.
“Subject to shareholder approval Brainworks is planning to issue a total 13 656 154 shares under an existing General Authority at an Issue price of least ZAR6,50 which will result in a capital raise of approximately $7 million,” said the source.
The development comes at a time when Brainworks’ founders George Manyere and Walter Kambwanji sold their shareholding in the company in exchange for shares in local unit GetBucks which is listed on the Zimbabwe Stock Exchange.
“Prior to these transactions Brainworks owned closed to 32 percent in Getbucks which it is now selling to George and Walter in exchange of cash plus the two’s shares in Brainworks.
“A total 15 percent of Brainworks’ shares in Getbucks will be swapped with George and Walter’s shareholding in Brainworks while the balance of 17 percent they will have to pay in cash,” said the source.
The cash consideration for the 17 percent is approximately between $5 to $6 million. Some of the funds will be used to strengthen Brainworks’ balance sheet by reducing its debt obligations.
GetBucks Microfinance Bank Limited’s profit for the quarter to September 30, 2017 jumped 66 percent to $1,1 million compared to the same quarter last year. Interest income grew 18 percent year on year to $2,1 million on the back of growth in loans and advances that also jumped 14 percent. Managing director Mercy Murevesi attributed the growth to introduction of new products for the small to medium enterprises such as asset finance, home equity and mortgage loans.
The selling of Getbucks will also result in the company focusing more on its core asset base, being hospitality, real estate and related investments.
Brainworks operates seven resort hotels and four city hotels in Zimbabwe, with some of them under the management of South Africa’s Legacy Hotels and Resorts. Its Hospitality entity African Sun recorded a 19 percent growth in revenue to $51,83 million for the year ended December 31, 2017, spurred by a jump in occupancy levels. Earnings before interest, taxes, depreciation and amortisation (EBIDTA) amounted to $8,67 million,
representing a 53 percent jump from the comparative period.
Brainworks is also invested in property concern Dawn Properties which already has a number of projects lined up this year.
Dawn Properties achieved revenue amounting to $5,1 million in FY2017 compared with $4,3 million for the same period in 2016, representing an increase of 18 percent. The increase was mainly attributable to strong performance coming from rental collection on the hotel property portfolio.
Dawn recorded a profit for the year amounting to $3,0 million compared to $1,0 million recorded in 2016. The Board declared a final dividend of $274 860, being 0,0112 US cents per share for the year ended 31 December 2017.