JSE Private Placements delighted with the “milestone”…

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JSE Private Placements (JPP) has already onboarded more than R5 billion in investor capital in the three months since its launch in mid-December.

The platform opens the door for the JSE to broaden its revenue stream by entering the private equity and debt market – not only in South Africa, but across the rest of the continent, where transactions of a worth about 4 billion dollars are concluded each year.

The blockchain-powered private placement platform was set up in conjunction with UK-based fintech firm Globacap and is set to completely overhaul the traditional private equity and debt-raising process.

Sam Mokorosi, Head of Transactions and Origination at JSE, explains that the Private Placements solution digitizes and automates processes to dramatically reduce administration time and speed up deal closing.

“We are delighted with this important step” says Leila Fourie, Managing Director of the JSE Group. “With JPP, we are building a transparent digital marketplace that connects private debt and equity issuers with investors, including venture capital backers.”

Globacap already digitally manages more than $10 billion of private equity and debt instruments on their platform for over 80 companies and 4,300 investors.

Myles Milston, Managing Director of Globacap, said the new platform will open up cutting-edge projects with a significant impact on South Africa’s economic growth, while positioning JPP as a market leader in digital private placements.

Issuers or companies attempting to raise equity or debt must go through a Fica check and then provide JSE Private Placements with details such as their historical financials and company forecasts. Once all the information is ready for publication, you must pay JSE Private Placements a publication fee, which operates on a sliding scale from R20,000 to R100,000, depending on the size of your transaction and whether or not you are using a to advise.

A fundraising advisor can be an auditing firm with a team of advisors, a stand-alone corporate finance house, or a JSE accredited sponsor. On our listed market, we have a multitude of accredited sponsors, all of whom would make good advisers. If you don’t have an advisor, the fees are slightly higher.

“The lowest level is R50 million and below – at this level the publication fee is R20,000 if you have an advisor and R50,000 if you don’t,” says Mokorosi.

Once you have raised the funding or equity you need, you must pay JSE Private Placements a placement fee, which ranges from 0.7% of the deal size to 0.15% for transactions R300 million or more.

JPP issuer fees

Source: JSE Private Placements

Mokorosi says posting fees will be waived until the deal is complete rather than being charged as an upfront fee – part of a special offer if you go live with your deal before June.

The use of the JSE Private Placements platform is free for investors or funders.

Lenders must have a Class II license from the FSCA and lenders must have a license to lend money under the National Credit Act.

If you’re looking to expand your individual portfolio with private equity investments, Mokorosi says the platform will most likely open up to retail investors in the coming months, with investment amounts starting at R10,000.

“We still have R2 billion worth of deals in the pipeline which will hopefully be released within the next month. These deals include a venture capital fund and a private equity infrastructure fund, both of which seek to raise their fund II via the platform.

“We also have a student housing contract and a renewable energy project coming online soon,” he says.

Looking ahead, Mokorosi is optimistic, expecting to launch five deals per month over the next two months and then double that month from June. BM/DM

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