Nimbus acquisition brings Paratus Telecom to the NSX through reverse listing
As of this Friday, 01 June 2018, Paratus Telecom will effectively be reverse listed on the Namibian Stock Exchange (NSX) via its majority shareholder, Nimbus Infrastructure Limited. This is the first reverse listing ever to be effected on the NSX. The sponsoring broker is PSG Wealth Management Namibia.
On Wednesday the private telecommunications company announced that Nimbus has acquired an additional 24.9% stake in Paratus taking its consolidated shareholding to 51.4%. This turns Paratus into a Nimbus subsidiary whose financial results in future will be included in the Nimbus annual report.
The relationship between Nimbus and Paratus started in October last year when Nimbus became the first Capital Pool Fund to be approved for listing by the NSX. Through a private placement comprising 80% institutional funds, 15% from individuals and 5% from Paratus, Nimbus raised just over N$102 million for its first round of deal financing. According to the Nimbus pre-listing statement, the fund will focus its investment strategy on Information and Communications Technology companies in sub-Sahara Africa.
“Nimbus intends to expand in a sustainable manner by way of strategically making further acquisitions and investments in the ICT sector,” said Nimbus co-founder and CIO, Romé Mostert.
In the first round of acquisition, Nimbus obtained 26.5% of the issued Paratus share capital for a cash consideration of N$20 million and the balance of N$75 million through subscription in a new issuance. The second round of acquisition is effected through a share swap.
“Pursuant to the announcements published by Nimbus on NENS, dated 27 March 2018 and 2 May 2018 respectively, shareholders are advised that Nimbus anticipates that all conditions precedent for the share swap transaction will be finalised by 01 June 2018, whereafter Nimbus will proceed to close the share swap transaction without delay,” Nimbus stated last week adding that the transaction has been approved by the Communications Regulatory Authority of Namibia.
Following the finalisation of the transaction, 18.8 million Nimbus shares will be listed on the NSX.
The transaction will broaden the Paratus capital base and enable its aggressive expansion plans and infrastructure roll-out. Paratus plans to invest a total of more than N$150 million in Namibian communications infrastructure over the next three years. The bulk will be invested in fibre optic networks.
Mostert said an additional rights issue that will take place on 13 July 2018 targets to raise another N$160 million for further strategic investments in the ICT sector across sub-Sahara Africa in the form of fibre to home roll-outs and the construction of co-location data centres.
“A consolidated interest in Paratus Namibia will make Nimbus an attractive investment partner, as Nimbus will be able to unlock unique synergies from future investment opportunities through its strategic alliance with Namibia’s largest independent telecommunications operator,” said Mostert.
It will also establish Nimbus as an integral player in the Paratus Group with a proven investment track record, which will secure Nimbus’ access to the Paratus Group investment pipeline in the rest of sub-Saharan Africa.
Nimbus’ interest in Paratus will allow access to the TKF-Line, envisaged to play an instrumental role in the future private sector growth in the ICT sector in Namibia and further into the land-locked countries of sub-Sahara Africa.
Paratus already provides products and services to 22 African countries and has fully-licensed and operational offices in Namibia, Angola, Botswana, Mozambique, Zambia and South Africa.
Nuts & Bolts
In terms of the share swap transaction Nimbus will acquire 24.9% of the issued share capital in Paratus and will therefore increase its shareholding from 26.5% to 51.4%. The purchase consideration shall consist of the issue of 8,495,400 new ordinary shares in Nimbus to be allotted to the sellers at a pre-determined and agreed upon price of N$10.50 each and a total value of N$89 201 700. The issue of the new ordinary shares in Nimbus will cause a dilution of 24.7% for all current shareholders.
In terms of the rights issue, qualifying shareholders will be entitled to subscribe for 15 545 085 rights issue shares at a subscription price of N$10.50 per rights issue share. This transaction will reduce the dilutionary effect to current shareholders, which excludes the share swap participants. (Nimbus Infrastructure Limited, Provisional condensed financial results released 24 May 2018)