By Felix Andrew
PROMOTERS of Mwanza Community Bank( MCB) have been given a second change to rearrange in initial public offering (IPO) through stock exchange ,the exercise which earlier aborted, the Capital Market and Securities Authority (CMSA) has confirmed.
Almost three years ago the management of MCB issued IPO and collected certain amount money from investors, but the promoters (all region’s districts authorities) failed to contribute.
Speaking to the Azania Post in an exclusive interview, the CMSA, Principal Public Relations Officer, Charles Shirima, said the IPO was not succeeded because Mwanza district authorities did not contribute adequately on time.
“We directed them to refund the money to investors who bought shares through IPO and gave another opportunity to rearrange for the same exercise”, he said.
It was earlier reported that MCB was selling five million shares at Tsh550 ($0.34) each through an initial public offering
The shares, whose proceeds were intended to be used to capitalise MCB as a community bank so as to meet the requirements of the Bank of Tanzania, was expected to start trading on the Enterprise Growth Market of DSE
MCB, whose licence was issued on March 1, 2012 , whose licence was issued in 2013, is startup institutions and do not have any track record of profitability.
To be allowed to list on the DSE’s new market segment, a company should be incorporated in Tanzania as a public company and have issued and paid up capital of at least Tsh200 million ($124,476).
Also, at least 20 per cent of its shares must be publicly held and the firm must provide a detailed profile including a feasibility study and a five-year business plan.
Growth markets, which are now gaining popularity in the region, have less stringent listing rules and have been created to offer small and medium-sized companies an alternative platform for raising cheaper capital instead of relying on expensive debt, while offering owners an exit option.
Mwanza, according to the 2012 census, has the population of 2.8 million people residing in seven municipals namely Nyamagana, Ilemela, Kwimba, Misungwi, Sengerema, Magu and Ukerewe.