JSE Private Placements platform broadens the debt-equity funding horizons

JSE Private Placements (JPP) has already onboarded more than R5-billion in investor capital in the three months since launching 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 just in South Africa, but in the rest of the continent, where deals worth about $4-billion are made annually. 

The blockchain-powered private placement platform has been set up in collaboration with UK-based fintech company Globacap, and is expected to completely overhaul the traditional process of private equity and debt-raising. 

Sam Mokorosi, the JSE’s head of deals and origination, says the Private Placements solution digitises and automates processes to significantly reduce admin time and accelerate deal closure. 

“We are delighted with this milestone,” says JSE group chief executive Leila Fourie. “With JPP, we are building a seamless digital marketplace that pairs private debt and equity issuers with investors, including venture capital funders.”

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

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Myles Milston, Globacap’s chief executive, says the new platform will open up leading-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 that are trying to raise either equity or debt have to go through a Fica check and then supply JSE Private Placements with details such as their historical financials and company forecasts. Once all the information is ready to be published, you have to pay JSE Private Placements a publishing fee, which works on a sliding scale from R20,000 to R100,000, depending on the size of your deal and whether or not you are using an adviser. 

“A fundraising adviser could be an audit firm with an advisory team, a standalone corporate finance house or a JSE-accredited sponsor. On our listed market, we have a host of accredited sponsors, all of whom would make good advisers. If you don’t have an adviser, the fee is slightly higher. 

“The lowest tier is R50-million and below – at that tier, the publishing fee is R20,000 if you have an adviser and R50,000 if you don’t,” Mokorosi explains. 

Once you have raised the funding or equity you require, you have to pay JSE Private Placements a placement fee, which ranges from 0.7% of the deal size up to 0.15% for deals that are R300-million and above.

JPP issuer fees

Source: JSE Private Placements