EFG Hermes, a leading financial services corporation in frontier and emerging markets (FEM), concluded its advisory role to international microfinance lender ASA International (ASAI) on its GBP 125m initial public offering (IPO) on the London Stock Exchange (LSE).
With a 12-country footprint spanning Asia and Africa, ASAI is one of the world’s largest private-sector microfinance institutions with about 1.9 million clients.
EFG Hermes was joint bookrunner on the transaction alongside Investec Plc, while Citigroup Global Markets acted as sole global coordinator, and Keefe, Bruyette, & Woods (KBW) as lead manager.
Shares of ASAI have been admitted to trading on the main market of the LSE with a premium listing under the stock ticker ASAI.
The offering saw ASAI’s selling shareholder, Catalyst Microfinance Investors (CMI), offer 40,000,000 shares, or 40%, of ASAI to institutional investors at an offer price of GBP 3.13; accordingly, ASAI’s total market capitalisation at admission was GBP 313m.
“This is a milestone transaction for EFG Hermes and one that marks the firm’s first investment banking foray in frontier markets following the launch of our frontier strategy in early 2017,” said Ali Khalpey, the London-based CEO of EFG Hermes Frontier.
“In just over 18 months since we began building our frontier platform, we have directly entered three new frontier markets; established distribution and sales capabilities in New York, London, Pakistan, Kenya, and Bangladesh; expanded our execution to cover 95% of the MSCI Emerging & Frontier Markets Index; and were ranked as the number one frontier market brokerage firm in the Extel Survey 2018.”
“With the successful conclusion of ASAI’s high-profile IPO, we have once again shown our ability to bookbuild and transact in frontier markets with an unrivalled global distribution platform supported by world-class research, brokerage, and investment banking services,” Khalpey added.
ASAI maintains a loan book with over 1.9 million clients comprised of low-income, predominantly female entrepreneurs across Asia and Africa. The global microfinance lender has outstanding loans of about $300m and serves its customers through a 1,400-branch network with some 9,000 employees operating in India, Pakistan, Ghana, Nigeria, Philippines, Kenya, Myanmar, Sri Lanka, Uganda, Rwanda, Sierra Leone, and Tanzania.
The company recorded a pre-tax profit of $43.4m in 2017, up 64% year-over-year.
“EFG Hermes has again demonstrated its ability to tap a global client base and utilise its unrivalled network of MENA clients to raise demand for compelling opportunities outside our traditional markets,” said Mohamed Fahmi, co-head of investment banking at EFG Hermes.
“The investment banking division has consistently been the MENA region’s top-ranked ECM advisors by market share. Our vision is to replicate our MENA success story into newly-entered markets through finding attractive investment plays that cater to the appetite of our global network of clients,” added Fahmi.
EFG Hermes began executing its frontier expansion strategy in early 2017 and has since opened offices in Pakistan, Kenya, and Bangladesh, and it has acquired an FCA license to operate in the UK.
These expansions have enabled the firm to offer a comprehensive suite of research, brokerage, and investment banking services to a broader network of domestic and international clients.