Tanzania oil firm offers shares

DAR ES SALAAM, Tanzania–Swala Energy, an oil and gas exploration firm, will soon sell some shares in an Initial Public Offering so as to list on the Dar es Salaam Stock Exchange (DSE).
 This will be done through the DSE micro-finance window, Economic Growth Market (EGM).
The energy firm’s prospectus awaits Capital Market and Securities Authority (CMSA) approval. If all goes well, it expects to list on EGM next month and start trading early 2014.
Swala which also listed on the Australian Securities Exchange (ASX) is expected to release 3.75 million shares to the public in Tanzania in areas of its operations.
DSE’s Chief Executive Officer, Moremi Marwa confirmed to East African Business Week during a telephone interview in Dar es Salaam last week that Swala IPO will be ready in a few weeks to come.
“Swala Energy is planning to raise as much as $2 million by listing its Tanzanian unit, Swala Oil and Gas Tanzania, on the DSE’s special window in the next quarter,” Moremi said.
The recent successful listing of Maendeleo Community Bank which was oversubscribed by 1.2 million shares early this month, has attracted many firms to rush for the DSE’s alternative market, EGM.
The opening of EGM, the second window of DSE that has less stringent condition of listing, has been termed as the catalyst for start-up and refinancing enterprises to boost their capital.           
  The Dar es Salaam bourse has approved Swala Energy’s share listing on the EGM, a move that could make it the third firm to start trading on the new board. The DSE disclosed the approval in its quarterly update for the period ended September 2013.
 The Australian 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.
  “We are expected before end of this year. The three firms, Maendeleo Bank, Mwanza Community Bank and Swala Energy Tanzania will be trading at the EGM,” Marwa said.
During this quarter the DSE Governing Council approved three new listings on the EGM market.
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% and 3.3% ownership of the company respectively.
In a statement Swala Energy discloses that, ‘The funds will be used to accelerate the company’s work programme in its existing licences, for corporate activity and for continued business development.’
Swala has a 32.5% 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.
Deposits in the Kilombero Basin appear to be similar to those discovered in the oil basins of Lokichar in Kenya and Lake Albert in Uganda where major oil reserves have been found.