Update: The offer closed successfully with 5x oversubscription and raised $241m for the 2 selling shareholders. See our updated story here.

Investors have just two days to join Angola’s largest initial public offering (IPO), as the offer by Banco de Fomento Angola, commonly known as BFA, closes at 3pm Angolan time on 25 September.

It is the largest IPO to date on Angola’s stock exchange, the Bolsa de Dívida e Valores de Angola (Bodiva). On offer are 4,462,500 shares, some 29.75% of BFA’s share capital:

• 15% of the share capital is offered for sale by shareholder Unitel, an Angolan telecommunications company controlled by the Angolan Government, This falls within the Government’s privatization programme
• 14.75% of the shares are offered by shareholder Banco BPI, a Portuguese lender that is a subsidiary of Spain’s CaixaBank SA.

The shares are offered at a price of between AOA 41,500 ($45.12) and AOA 49,500 ($53.88) each, a premium to the AOA 6,000 nominal value of each share. Investors can apply for a minimum of 1 share, up to a maximum of 1,499,999 shares per investor.

It will be the fourth listing on Bodiva and the third bank. In 2022, Banco Angolano de Investimento (BAI) raised AOA 40.1bn through selling 10% of its shares in the first IPO, see our article . The Bodiva exchange has been mostly used for issuing Government bonds. Our article in April said that 3 listings are expected in 2025.

BFA reports that it has over 3 million customers and employs more than 2,500 people including in 194 branches. Chief Financial Officer Francisca Ferrao Costa told Bloomberg in an interview by Candido Mendes that it’s “an opportunity to diversify our shareholder base and reinforce institutional solidity.” According to an investor presentation BFA had a net profit of AOA 205.8bn in 2024 and a return on equity of 33.7%.

For information on how to apply, check the offering webpage with links to documents (all in Portuguese) which can be found here . A full list of intermediation agents is available.

Listing due 30 September

The shares will be listed for trading from 30 September. According to this news story on African Markets website, “a special trading session 9is) scheduled for the 26th to determine the results and set the final price”. The upper price would value BFA at $801m.

If the offer is fully subscribed, the Government is set to raise AOA 93.4 billion ($101.5m) – AOA 111.4bn ($121.0m), depending on the final price, and BPI will get AOA 91.8bn ($99.7m) – AOA 109.5bn ($119.0m). BFA employees have 2% of the shares reserved, divided equally between the shares offered by Unitel and those from BPI. The shareholdings after the offer will be Unitel 36.9% and BPI 33.35%, according to Costa.

Angola’s Capital Markets Commission (CMC) approved the offer on 15 August. Bloomberg describes it as “a major step in the oil-producing nation’s efforts to increase transparency and attract foreign investment as the Government seeks to reduce the role of the state in the economy.”

Angola’s privatization surge

According to this article by Walid Kéfi of Ecofin agency: “The IPO is part of the second phase (2023-2026) of the ProPriv privatization programme, which began in 2019. The programme not only aims to attract foreign capital but also to open up strategic sectors to competition to stimulate growth and reduce the Angolan economy’s heavy dependence on oil.”
The European Central Bank had been putting pressure on Caixabank to reduce its Angolan exposure since 2017.

The privatization programme is called ProPriv 2023-2026 and a Presidential Order for the privatization was issued on 23 August 2024 under the Basic Privatization Law, according to this article from Portugal’s LUSA agency: “Initially planned for the 2019-2022 period, with a total of 195 public assets to be privatised, ProPriv was extended to the 2023-2026 period by Presidential Decree no. 78/23 of 28 March (2024).”

According to this article by Montel Kamau on Kenyan website Serrari Group “BODIVA was founded in 2014, but with Angola’s economy dominated by state companies – a legacy of its socialist past – it has mainly served as a market for government bonds. The exchange currently trades an equivalent of $2 billion annually in local currency and has 23 commercial banks and two brokerages as members.

“The stock exchange expects the number of listed companies to soar from 4 to 10 by 2027, with major state-owned enterprises including diamond company Endiama and oil giant Sonangol preparing for public offerings.” The article gives more details of the privatization programme with 73 more state-owned assets and companies to be privatized in the current phase. “The first phase successfully privatized 96 companies between 2019 and 2022, raising $1.13bn through public tenders, auctions and IPOs.”

(Photo: Marginal or seafront of Luanda in 2018, photo Deposit Photos Silva Pinto)