This report from Bloombergs via Moneyweb, published on 14 March 2024.

Cilo Cybin Holdings, a South African medical cannabis company, said it’s revived a plan to list on the stock exchange in Johannesburg.

The special purpose acquisition company is opening the sale of 10% of its shares on Thursday and aims to raise R7.1 million ($381,000), it said in a statement.

An earlier attempt was called off after capital raising took place slower than anticipated. The company is backed by Malaysian biotechnology firm ALPS Global Holding Bhd.

Companies are mostly planning spinoffs and carveouts in the next few months as part of their listing plans, bankers said. Conglomerates want to unlock value from profitable subsidiaries by unbundling them, raising capital and deleveraging stretched balance sheets, said Stephen Nyakudarika, 

investment banking advisory and origination director for Deutsche Bank AG.

Cannabis firm Cilo Cybin Holdings’ revival of its IPO plans this month is part of a broader renewed energy on the JSE.  Transaction Capital plans to unbundle its WeBuyCars unit in April, Pick n Pay Stores has plans to spin off its discount supermarket chain Boxer, and RCL Foods will spin out its Rainbow Chicken business.

One of the more highly anticipated listings is Coca-Cola Beverages Africa, on ice for three years due to unfavourable conditions. The plan is to list on Euronext, with a secondary listing on the JSE. Bloomberg previously reported that the listing could be valued at as much as $8 billion.

“Next year, we expect more traditional IPOs with companies seeking to list with a view to raise permanent capital and as a partial exit mechanism for shareholders,” said Nyakudarika.

The JSE has tried to cut red tape, and now allows secondary listings for companies primarily listed on the Hong Kong Exchanges & Clearing, said Patrycja Kula-Verster, the bourse’s primary markets business development manager.

JPMorgan’s Bell pointed out that capital markets have returned globally, and typically emerging markets and South Africa follow the US, UK and Europe.

Bankers said interest for IPOs could come from sectors including consumer, resources and industrials, financial services, fintech and digital infrastructure.

Outside of South Africa, other African companies looking to raise equity capital have tended to prefer an offshore listing, typically NYSE, LSE, or Euronext rather than the JSE. That’s down to greater liquidity on those markets, and a larger pool of investors who understand and have investment mandates for emerging markets, said Nyakudarika.

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