Swala Energy gets Dar es Salaam bourse approval to list after IPO

A snapshot of some of Swala Energy's blocks where it has interests. Graphic/SWALA ENERGY 

The Dar es Salaam bourse has approved Swala Energy’s share listing on the enterprise and growth market (EGM), a move that could make it the third firm to start trading on the new board.

The Dar es Salaam Stock Exchange (DSE) disclosed the approval in its quarterly update for the period ended September 2013.

Swala Energy is now waiting for an approval from Tanzania's Capital Markets Authority on the planned initial public offer (IPO) so that it can sell its shares to the public.

The Australian hydrocarbon exploration firm, will be listing on the Dar bourse after the IPO, joining Maendeleo Bank whose shares are already trading on the new board and Mwanza Community Bank whose IPO was extended.

“During the quarter the DSE Governing Council approved three new listings on the EGM market segment. The approved listings are for Maendeleo Bank, Mwanza Community Bank and Swala Energy (Tanzania),” said the DSE in its quarterly update.

The Australian Securities Exchange (ASX) listed explorer’s plan to list on the DSE, which is expected to help lift the firm’s profile locally, will further dilute the parent company shareholding even as it seeks to raise capital for its activities in the East African region.

Tanzania Securities Limited is the nominated advisor for Swala Energy and its IPO comes at a time when the exploration firm raised $4 million through a private placement.

The private placement saw two strategic investors – an investment firm based in Abu Dhabi called Hayaat Group and Dr Reginald Mengi, a private investor – take up 9.4 per cent and 3.3 per cent ownership of the company respectively.

“The funds will be used to accelerate the company’s work programme in its existing licences, for corporate activity and for continued business development,” said Swala Energy in a statement.

Swala has a 32.5 per cent equity interest in each of the Pangani and Kilosa-Kilombero hydrocarbon exploration blocks in Tanzania and in Kenya it jointly owns the 12BB block with Tullow Oil.

Earlier this month, the firm announced positive results of its 2D seismic programme at the Kilombero basin whose initial results suggested the presence potential deposits.

The potential deposits on the Kilombero basin appeared to be similar to those observed in the oil basins of Lokichar in Kenya and Lake Albert in Uganda where significant oil reserves have been found.

Maendeleo Bank, the first to list on the EGM segment, offered eight million shares with a green shoe option of 1.2 million shares at Sh500 each but the share hit the bourse at Sh600.

Jonathan Swalala, head of operations at CORE Securities, Maendeleo Bank’s nominated advisor, said that the IPO which was seeking Tsh4 billion ($2.5 million) was oversubscribed by 13.33 per cent.

It attracted bids worth Tsh4.533 billion ($2.8 million) which was within the green shoe option of 15 per cent meaning that there would be no refunds.

Source: www.theeastafrican.co.ke