Tanzanian agribusiness company Jatu PLC seeks to raise US$3.2m through IPO for business expansion
TANZANIA – Jatu PLC, a Tanzanian agri-business company is undertaking an initial public offering for its 15 million ordinary shares at the Dar es Salaam Stock Exchange (DSE) at Tsh 500 (US$0.22) per share.
According to the company, the sale of the shares which commenced in 1st June is set to be finalized on 15th July with a target of raising Tsh 7.5 billion (US$3.2m).
The DSE has suspended JATU from trading for a period of two months until July 28th to necessitate the synchronisation of JATU’s Corporation Actions related to split for existing listed shares and price adjustment as well as the ongoing new IPO.
All the shares following the split i.e., existing shares together with new shares subscribed during the IPO, will be credited electronically and deposited in the Central Depository System on July 29.
Normally when a firm splits its shares, the number of shares of that company increase, but the ‘market capitalisation’ remains the same leading to the price per share going down.
According to reports by Ipp media, Jatu will inject the raised amount into commercial farming and value addition of agricultural produce.
The company will focus on crops that have high demand within the country, including maize, sunflower and rice.
JATU is seeking to set up four milling machines with capacity of producing 50 metric tons of maize flour per day which will be supplied to urban markets throughout the country.
The company has already secured 5,000 acres of land in Kiteto district of Manyara region where it plans to undertake the production of the crops.
JATU is seeking to set up four milling machines with capacity of producing 50 metric tons of maize flour per day.
“So far we have cultivated 500 acres and the money that we will raise through the initial public offer will be invested in further cultivation of the farm.
“Our shares are selling at Tsh 500 (US$0.22) each and we welcome both local and foreign investors to buy a stake and be part of this promising company,” said Jatu Plc’s CEO, Peter Isare.
The IPO follows the listing of over 2.16 million ordinary shares worth over Tsh 1.08 billion (US$465,000) on DSE’s enterprise growth market (EGM) window in November last year.
“Since then, the value of Jatu Plc’s shares has increased from Tsh 420 (US$0.18) each to Tsh 1,160 (US$0.50) currently which demonstrates that there is a public appetite to invest in the company,” said Jatu Plc’s Board Chairman, Dr Zaipuna Yonah.
He revealed that the company targets to have farms in all districts of the country and undertake agribusiness activities.
Through Jatu, over 5,000 smallholders have benefited directly in terms of loans, farming equipment, training and technical advice.
In Njombe region, the company has cultivated 500 acres with avocado trees with the first harvest of fruits expected in three years’ time. It also has an orange farm in Handeni district of Tanga region.
Other than farming, the company has also invested in the retail sector as it currently boasts of five supermarkets in different parts of the country including Arusha, Dar es Salaam, Dodoma, Mwanza and Mtwara.
