An International law firm, Baker & McKenzie; has announced that African companies are likely to launch more than a dozen initial public offerings (IPOs) this year, defying commodity price drops and capital flight from emerging markets.
The law firm said they are likely to raise $3.1bn, about $1.5bn more than the amount raised last year by 21 IPOs on the continent, if transactions in the pipeline are concluded.
Baker & McKenzie, is a leading law firm by deal count for mergers and acquisitions in emerging markets.
— Baker & McKenzie (@bakermckenzie) March 1, 2016
The firm said, the projected amount to be raised would be the highest since 2010 adding that a lack of demand at home could force companies to seek dual listings to expand pool.
“Fifteen IPOs are already in the pipeline, with one, Nigeria’s Interswitch, which processes payments for banks and operates in five African countries, could be Africa’s first billion-dollar IPO,” the firm said in the statement.
Baker & McKenzie added that other IPOs expected included the self-listing of the Dar es Salaam Stock Exchange, Botswana Telecoms and real estate fund Tadvest’s dual listing in Mauritius and Namibia.
Head of the company’s capital markets practice for Europe, Middle East and Africa, Edward Bibko, explained that the wider continent still faces challenges.
“This means larger companies have to ‘dual-list’ in a global financial center like London, as well as their home market.”
Private-equity companies amassed $4.3bn investment opportunities in Africa last year.
According to a London-based African Private Equity and Venture Capital Association, the fundraising has been the highest since 2010 compares with $1.9bn in 2014.