AEL Zambia on the LUSE

The Zambia Privatization Trust Fund (ZPTF) announced last week that the government intends to sell its 20% stake in AEL-Zambia, a mining explosives company, via an IPO on the Lusaka Stock Exchange (LUSE). There will be more than 4 million shares offered in the issue and priced at 700 kwacha each. All told, the stake is valued at just over $683,000.

The ZPTF expects a full subscription of the shares and a significant run-up in share price when the shares hit the market on October 18.

AEL-Zambia is a subsidiary of South Africa’s African Explosives Limited. It has benefited from the renaissance in Zambia’s copper mining industry with 2005 revenues increasing 32% over 2004. Moreover, it recently won one of the largest explosives contracts in African history at the Lumwana copper mine. The size of the contract has not been released, but AEL’s plans to invest in $5 million worth of infrastructure at the site indicates that it represents a major boost for the company.

If you’d like to apply for shares before the company lists on the LUSE, you’ll have to act fast. The offer closes on September 29.