Standard Bank’s role in the recent equity capital raise of property firm MPICO Limited (MPICO) on the Malawi Stock Exchange (MSE) demonstrates the bank’s strong investment banking capabilities and its ability to deliver successful capital markets transactions on the African continent, it has been observed.
Standard Bank acted as the sole financial advisor to the rights issue, which saw MPICO raise approximately K9 billion through the issuance of over 1 billion shares at K7.83 per share. This landmark transaction is the largest ever capital raise by way of a rights issue in Malawi.
The Bank’s Head of Investment Banking, Shakil Satar said that the MPICO deal confirms Standard Bank’s expertise as a leading player in Malawi’s capital markets.
“This transaction illustrates our partnering spirit and the focus to drive Malawi’s capital markets forward. Our strength lies in our ability to leverage our local, regional and global relationships and capabilities to benefit capital formation across Africa,” he said.
Satar said Standard Bank’s understanding of the Malawian capital market, coupled with its strong equity platform, meant the bank was best placed to ensure MPICO’s rights issue was a success.
He added that the capital raised will support the rehabilitation of prime properties and further property development, which will create jobs through construction and service contracts. This in turn, will result in a positive impact on Malawi’s economy.
According to Satar, the success of this capital raise is an indication that funding requirements do not always need to be met with a debt solution as the equity capital markets can provide an alternative and attractive source of funding.
“The MPICO transaction has led to a shift in the way companies view raising equity creating new opportunities for the bank to work with a broad range of Malawian companies to restructure their balance sheets through equity funding, especially in the prevailing high interest rate environment,” he said.