Next month’s debut initial public offering (IPO) on Angola’s BODIVA stock exchange is expected to unlock a wave of new listings, its chief executive said, as the Southern African oil producer forges ahead with a far-reaching privatisation drive.
BODIVA will begin accepting bids next week for 1.945 million shares – a 10% stake – being offered by BAI, Angola’s largest private bank. BAI’s listing is expected on June 9.
Under President Joao Lourenco, the OPEC member has embarked on an ambitious reform programme to modernise the economy and attract private investment.
The state plans to sell its stakes in firms including upstream oil company ACREP, Caixa de Angola bank, fuel retailer Sonangalp and television and telecommunications provider TVCabo Angola.
“All these companies revealed, publicly or privately, their ambition to list capital with BODIVA,” the exchange’s CEO Walter Pacheco told Reuters. “I think that the first IPO will be decisive to promote the market.”
BODIVA was founded in 2014. But with Angola’s economy largely dominated by state-owned companies – a legacy of its socialist past – the exchange has mainly served as a market for government bonds, trading debt of around $2 billion in 2020.
“The market did not advance earlier because it was necessary for the state to reduce its direct intervention in companies and in the economy,” Pacheco said.
The 10% of capital offered by BAI represents stakes currently held by state-owned oil and diamond companies Sonangol and Endiama.
Foreign investors will be allowed to purchase shares sold at between 17,200 and 20,640 kwanzas ($42.92 and $51.50) each, a prospectus published on the bank’s website showed.
The stake sale should raise 33 billion to 35 billion kwanzas ($82-87 million), Pacheco said.
Angola plans to privatise some 62 state assets this year, though the sale of a 30% stake in state oil company Sonangol, seen as the crown jewel of the privatisation push, could take another two years.
“We know that the restructuring of Sonangol, because of its dimension and relevance for the country, is going to take some time,” Pacheco said.
BODIVA was prepared to work with Sonangol on privatisation, he said, but the extent of the exchange’s involvement was not yet clear.
“We don’t know if the country and our capital market are ready to negotiate this kind of asset. Maybe Sonangol will spread their capital in different jurisdictions, not only in Angola,” Pacheco said.