Industrial company Mahwi Grain Millers Plc has today (2 September 2024) listed its first corporate bond on the Rwanda Stock Exchange (RSE).
The first RWF 3 billion ($2.25 million) tranche, with 5-year tenor (duration to maturity) closed on 23 August, after opening on 9 August. The bond offers a coupon of 15% per annum, payable semi-annually. We have not yet found a publication of the results of the bond offer [to be updated].
The programme aims to raise RWF 5bn ($3.75m) over two tranches. The second tranche will be worth RWF 2bn and the tenor will be determined at a later stage.
Mrs. Chantal Habiyakare, Chairperson of Mahwi Grain Millers Plc, said, according to the RSE press release: “The capital raised through the bond issuance will enable the company to expand and contribute to the country’s vision of self-reliance in the agriculture sector”.
Proceeds from the second tranche will mainly cover acquiring equipment and related construction, including RWF 1bn on animal feed machinery equipment, RWF 600m for purchase of silos for storing maize grains, and RWF 400m for a building for the animal feed factory.
Mahwi Grain Millers was incorporated in 2018 and specializes in processing grains into human and animal food and based in Bugasera Special Economic Zone in southeastern Rwanda. Currently it is mainly producing and distributing 150 tonnes of refined maize flour every day. It also produces fortified maize flour for school feeding, maize flour for high-end consumers and for export. Its processing lines have production capacity of 250 tonnes daily.
Habiyakare, who is the Chief Audit & Risk Officer at Crystal Ventures, earlier said Mahwi will use the proceeds of the bond capital raise to buy inputs: “Funds raised from the bond will enable the company source for maize which is the main raw material that we need and has been a heavy operational cost.” According to the prospectus, Mahwi will use at least RWF 2.5 bn as working capital to purchase maize grains on season for aggregation, while RWF 500m will used to pay creditors.
Pierre Celestin Rwabukumba, CEO of the Rwanda Stock Exchange, said: “It is truly exciting to see highly ambitious and fast-growing companies, such as Mahwi Grain Millers Plc, earning a place on the RSE market. This achievement not only demonstrates the potential of SMEs in Rwanda, but also serves as an excellent example of how the capital market ecosystem can be utilized as a long-term funding source. I encourage other private sector players, both large and SME companies, to consider this option for their growth and development”.
The two-year road to listing began in 2023 at the Capital Market Investment Clinic led by the Rwanda Stock Exchange (RSE) in collaboration with the Capital Market Authority and the Ministry of Finance and Economic Planning. Davis Gathaara of stockbroker Baraka Capital was the main transaction advisor. On 28 June Mahwi was the fourth company to join the RSE Profile Board after completing the clinic.
On 9 August, at the launch of the bond offer, Thapelo Tsheole, the Chief Executive of the Capital Market Authority regulator in Rwanda, encouraged small and medium-sized companies: “No company is too small to raise money from the capital markets and we will continue to work closely with the private sector to help them raise capital and expand their services and footprint.” (press release).
Photo: Business and capital markets leaders in Rwanda watch Mahwi Grain Millers chairperson ring the bell for listing the corporate bond for trading on the Rwanda Stock Exchange after raising capital. (Photo from Rwanda Stock Exchange on X, formerly Twitter).
