Globetrotter Agency, a local tours and travel firm, has raised Sh21.4 million through the Nairobi Securities Exchange’s (NSE) incubation platform Ibuka.
The firm sold shares to investors for a stake that is yet to be determined, with the money realised being used as working capital in seeking preferential terms with hotels and airlines.
Globetrotter Agency will pay the deal arrangers Sh1.17 million for the exercise, according to the Kenya Association of Stockbrokers and Investment banks.
The capital raised is to be converted into ordinary shares via call option before March 21, 2021 or as agreed on a pre-determined conversion formula.
Initial projections indicate that the new investors would be granted a stake of between 8.4 per cent and 12.2 per cent of the four-year-old company.
The return on investment for the equity investors shall be 1.1 per cent per month with a future dividend yield of nine per cent.
Tina Patel, the chairperson of Globetrotter Agency, said the capital injection through the convertible shares was a safe means to grow the firm while offering investors an opportunity to unlock equity value upon redemption.
"We were greatly surprised at what our tremendous forward equity valuation could be based on parameters we meticulously learnt under Ibuka," she said.
Amish Gupta, the Ibuka Implementation Committee chair and an investment banker, said the new development raised hope for more capital raising initiatives through Ibuka.
"More and larger capital raise calls are expected in the coming weeks and months. Ibuka Programme is the new ecosystem that shall lead to volume tradings and listings for the public," said Gupta.
The Ibuka Programme is designed to provide visibility and understating of the capital markets for emerging enterprises.
Visibility is the optimal degree to which a hostee of the programme such as Globetrotters may attract prominence and publicity through strategies offered by NSE.
RentCo East Africa joined the Ibuka Programme in September this year as the 17th firm.
MySpace and Tuskys are the other mentees on the incubation initiative.
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