AN agri-based firm, Jatu Plc, is seeking to raise a capital of 7.5bn/- through an Initial Public Offer (IPO) on which it listed 15,000,000 new shares.
During an event to launch the shares over the weekend, JATU’s Managing Director Peter Isare said the capital will be injected into commercial farming and setting up processing factories to add value to agricultural produce.
“Our aim is to ensure that Tanzanians benefit from a whole value chain of the agriculture,” Mr Isare stated in Dar es Salaam.
The company will focus on crops that have high demand within the country, including maize, sunflower and rice as well as investing in modern farm equipment such as tractors.
“Support us in this new endeavour so that we can prove that we really want to transform agriculture in the country,” Mr Isare assured.
He said the agricultural projects that the form intends to venture into would also contribute to the country’s food security.
The launching of the shares under the IPO came after the Stock Exchange (DSE) temporarily suspended Jatu from trading for two months to pave the way for issuing an (IPO).
The bourse said the suspension started June 1st and would last up to July 28th as the firm wants to list 15,000,000 new shares in a way of splitting whereby an IPO price is 500/- a share,
Normally when the firm splits its shares, the number of shares of that company increase, but the ‘market capitalisation’ remains the same and as the number of shares increases, the price per share goes down.
Orbit Securities Head of Research and Analytics, Imani Muhingo, said the suspension was ‘a well procedural’ since Jatu is an IPO from the beginning of this month.
“It’s self-defeating if the shares would still be trading in the secondary market” while others are in the primary market, Mr Muhingo told Daily News yesterday.
Jatu, the agri-based firm share was trading 1,200/- before the suspension on Tuesday against 420/- during listing late last November.
Vertex International Securities Ahmed Nganya seconded Mr Muhingo said the “temporary suspension was to allow for the IPO of new Jatu shares that take place” between 1st June and 15 July.
DSE said in a statement that the suspension following the guidance from Capital Markets and Securities Authority (CMSA) necessitate the harmonization of Jatu’s corporation actions.
The statement said all shares, following the share split for existing shares together with new shares subscribed during the IPO, will be credited electronically and deposited in the Central Depository System on July 29th to enable secondary trading.
Jatu runs and manages various agricultural projects in collaboration with its members, which currently totalling at over 30,000 members.
Agriculture is the main foundation and pillar of the company, where Jatu seeks areas or farms and researches.