Balwin Properties Plans $110 Million Johannesburg Share Sale

  • Developer to list on JSE to exploit rising demand for housing
  • Investec named bookrunner; Buffet Investments to cut stake

Balwin Properties, a South African housebuilder, said it plans to raise about 1.5 billion rand ($110 million) selling shares on the Johannesburg Stock Exchange to capitalize on growing demand for residential property.

The company plans to list in mid-October, pending approvals from the stock exchange, Chief Executive Officer Stephen Brookes said by phone on Tuesday. The builder develops residential estates in South Africa’s major cities, which include apartments and amenities such as restaurants and sport facilities, he said.

“Listing on the JSE will grant us access to the capital markets and enhance our profile,” Brookes said in an earlier statement. “It will also support our strong development pipeline and geographical expansion.”

Balwin is the second company in as many days to announce an intention to list on the JSE, after construction-equipment company Waco International on Monday. The exchange had the most first-quarter IPOs this year since 2008 as the FTSE/JSE All-Share Index rose to a record, although activity has since quietened as the gauge declined by about 9 percent.

“I think that residential is very much the flavor of the month,” Brookes said. “A lot of the big commercial players are getting into residential now and we believe we’ve got a strong enough brand to stand alone.”

Balwin, based in Johannesburg, is owned 70 percent by management and 30 percent by private-equity partner Buffet Investments. Brookes will probably cut his stake to 40 percent from 50 percent through the IPO, while Buffet will reduce its holding to 15 percent, the CEO said.

The company expects profit after tax of about 550 million rand in the year through February 2016, and predicted profit growth of above 25 percent for the following 12-month period. Investec has been appointed book runner for the proposed listing.

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