Khalid Abdulla. Picture: FINANCIAL MAIL
Khalid Abdulla. Picture: FINANCIAL MAIL

The private placement by Ayo Technology, which will list on the JSE on Thursday, has been heavily oversubscribed.

On Monday, Ayo — which is controlled by African Empowerment Equity Investments (AEEI) — confirmed irrevocable commitments for shares from invited investors to the value of R5.3bn, comfortably more than the R4.3bn Ayo aimed to raise in the private placement.

Despite the hefty oversubscription, Ayo has decided not to increase the size of the private placement. The strong demand for Ayo shares means the company will come to the JSE with an inferred market capitalisation of R14.7bn.

Final allocations of shares were under way, said AEEI CEO Khalid Abdulla, noting the participation of a mix of institutional and individual investors in the private placement. The share allocations would take cognisance of the need to enhance or at least maintain Ayo’s black empowerment credentials, he said. It is expected that AEEI’s stake in Ayo will be reduced to 49% after the listing.

The listing comes much earlier than expected. It was important for Ayo to get to market as soon as possible, Abdulla said.

"We have a number of key deadlines to meet … these are business opportunities that are going to enhance Ayo’s longer-term prospects."

Ayo, which will acquire a 30% stake in British Telecoms SA from AEEI, has targeted a 5%-8% share of the R174bn local information and communication technology market by 2022.

Ayo’s prelisting statement pencilled in revenue forecasts of R4.4bn and R7.7bn for the financial years to end-August 2018 and 2019, respectively.

The company forecast profit after tax of R764m and R1.07bn, with earnings coming in at 243c a share and 306c a share.

Shares in AEEI, which is set to bank R1bn from the sale of its shareholding in BT to Ayo, were subdued on the JSE on Monday. The share was unchanged at 540c in thin volumes.