JSE Limited, the operator of the Johannesburg Stock Exchange (JSE), has acquired a minority stake in UK fintech company, Globacap, for £4 million (R82.7 million).
The JSE notes that it has entered a transaction with Globacap to progress a digital private placements platform and registry services.
According to the JSE, the deal brings together the JSE, Africa’s largest stock exchange, and Globacap, a private placement and capital management platform that digitally administrates over £1 billion of private shares and debt instruments for 60 companies and over 8 000 shareholders worldwide in 35 countries.
The bourse notes that Globacap’s unique distributed ledger technology allows digital registrar services to be reflected in real-time.
The JSE will collaborate with Globacap to establish a private placements platform to advance and digitise capital raising for infrastructure finance and SMEs.
“The deal with Globacap will support a critical growth node across the continent in the infrastructure and SME sectors. The transaction reinforces the JSE’s commitment to foster inclusive and sustainable growth by advancing access to capital markets,” says Leila Fourie, group CEO of the JSE.
The stock exchange says the continent requires extensive investment into infrastructure as a vital imperative for its growth.
It points out that African infrastructure funding requirements are estimated to range from $130 billion to $170 billion per year; however, commitments fall short of funding requirements.
“The JSE will use Globacap’s innovative technology and expertise to progress infrastructure finance and SME private funding. The deal will help stimulate investment into those markets by narrowing the funding gap and supporting job creation and economic growth,” says Valdene Reddy, JSE’s director of capital markets.
As part of the transaction and reaffirming the JSE’s growth strategy, the exchange will invest £4 million (R82.7 million) for a minority equity stake in Globacap.
The investment in Globacap will be funded from the group’s existing cash reserves and is expected to be finalised during the first quarter of 2021, says the JSE, adding that the transaction is subject to the fulfilment of certain conditions precedent including approval by relevant local and UK authorities.
Myles Milston, CEO of Globacap comments: “This is an incredible project in a vast and growing market. We are excited to be part of it, to launch both platforms with the Johannesburg Stock Exchange, and for the JSE’s investment into Globacap, representing a milestone in our progress. The deployment of our technology with such an established public market as the JSE moves us one step closer to realising our goal of the digitisation of the world’s private capital markets.”
“The Globacap collaboration and investment is part of our ongoing strategy to sustainably grow and diversify our business.Working with a leading capital markets fintech player positions the JSE well in our efforts to innovate a digital capital raise process in private placements,” Fourie concludes.
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