Mahwi Grain Millers Plc on Friday, August 9, announced the issuance of its inaugural bond worth Rwf5 billion, following approval from the Rwanda Capital Market Authority (CMA).
Mahwi Grain, an industrial processing company which deals in maize processing, has said that the public offer will close on August 23, before being listed and traded on the Rwanda Stock Exchange from September 2.
The firm has planned to issue its bond offer in two tranches. The first tranche will be worth Rwf3 billion with a tenor of five years. The second tranche will be worth Rwf2 billion and the tenor will be determined at a later stage.
The company’s debt security has a fixed interest rate of 15 per cent per annum payable semi-annually.
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According to the company’s board chairperson, Chantal Habiyakare, the company plans to use the proceeds of the bond to source for raw material for the company’s operations.
"The 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,” she said.
According to the company’s prospectus, the issuer intends to use the proceeds from phase one mainly for grain maize aggregation. At least Rwf2.5 billion will be used working capital to purchase maize grains on season for aggregations, while Rwf500 million will be dedicated toward meeting creditor obligations.
Proceeds from the second phase will mainly cover acquisition of equipment and related construction activities, with Rwf1 billion set aside for financing animal feed machinery equipment, Rwf600 million for purchase of silos for maize grains storage, and Rwf400 million for animal feed factory building.
The chief executive of the Capital Market Authority, Thapelo Tsheole, encouraged small and medium sized companies to consider raising capital through the capital markets
"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,” he noted.
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In 2023, Mahwi Grain Millers qualified for the RSE Investment Clinic and ultimately embarked on the listing journey.
Mahwi Grain Millers is a producer of three main products, including refined maize flour for the mass market, fortified maize flour for school feeding and maize flour for high-end consumers and the export market.
It has established processing lines with a production capacity of 250 tonnes daily. The capital that Mahwi is raising will enable it to scale up its aggregation system and expand its investments by establishing a high-yield animal feed production plant.
This investment expansion, it said, is planned for early 2025.