PNH - Paratus Namibia Holdings (previously Nimbus Infrastructure) is a listed company under the Technology Sector on the NSX (Namibian Stock Exchange), with the objective of pursuing investments in the Information Communication and Technology Sector in sub-Saharan Africa.
Stock Exchange: NSX
Share Code: PNH
Nimbus Infrastructure started of as the first CPC in Namibia and has subsequently converted to a full listed company on the NSX.
CPCs, or Special Purpose Acquisition Companies as they are known elsewhere, are structures that have been used in a number of countries around the world, but are new to Namibia. These companies are cash shells that are listed on the stock exchange for the purpose of capital raising, ultimately to purchase or develop assets that fulfil a set of predetermined criteria, as stipulated in the company’s listing documentation.
The CPC structure is a structure that has gained popularity in various markets in the world, especially in the United States and Canada. CPCs are generally used in circumstances similar to reverse mergers, but offer the benefits of being well funded and liquid, having hand-picked suitably experienced management teams, and offering a clean slate. In South Africa, a number of CPC type listings have been done over recent years under the Johannesburg Stock Exchange equivalent of the CPC, the Special Purpose Acquisition Company.
These structures serve an important role in developing the financial sector, as well as addressing situations where conventional financing methods are not viable, by facilitating access to financing for the development of large projects through the listed capital markets.
PNH has clearly defined investment criteria whereby Viable Assets will be evaluated. In essence, these may include direct or indirect investments in the ICT sector in sub-Saharan Africa. Investments will be evaluated against a required rate of return, based on the capital asset pricing model, with the equity risk premium calculated as per a macroeconomic model that considers the country of investment’s long-term government yield, expected real growth in GDP, expected inflation and the relative valuation of the local equity market. In addition to the equity risk premium, the required rate of return will also consider the specific risk premium of the considered Viable Asset, based on earnings visibility.
Following the Listing of Nimbus on the NSX, as per the Investment Agreement, Cirrus Capital will identify and evaluate potential Viable Assets. Once the research, valuation and due diligence have been conducted, and Cirrus Capital is satisfied with the potential Viable Assets, Cirrus Capital will present such to the Investment Committee of the Board for consideration. If approved, the Investment Committee will take the Viable Assets to the Board for a vote by disinterested Directors.
If approved by the Board, the Viable Assets will be proposed to Shareholders via a circular, to be voted on at a general meeting of Shareholders. The circular will also include proposals for the application of any remaining Offer Proceeds.
Once approved by the Shareholders and acquired, the Viable Assets will be managed in-line with the individual transaction agreements and the Management Agreement signed between Paratus Telecommunications (PTY) Ltd (the Manager) and PNH.