MICROCAPITAL STORY: Mexican Microfinance Lender Financiera Independencia SAB Plans Initial Public Offering

Financiera Independencia, a Mexican microfinance institution (MFI) founded in 1993, has announced plans in a recent prospectus for a public offering of up to 20 percent of the company through primary and secondary offerings in Mexico and international markets. According to estimates on CNNMoney.com, the offering will raise up to 3.26 billion Mexican pesos or equivalent USD 305.6 million through the sale of 136 million shares which includes a provisional over-allotment of 17.7 million shares. Financiera Independencia will use net proceeds from the primary offering to fund new lending, expand its branch network, and for other corporate development initiatives.

According to its latest financial statement, Financiera Independencia had total assets of 2.95 billion Mexican pesos (approximate equivalent USD 275 million) and a loan portfolio of 2.52 billion Mexican pesos (approximate equivalent USD 234 million). Its return on assets was 20.40 percent and its return on equity was 53.20 percent. Financiera Independencia operates as a multi-purpose, non-bank finance institution. According to its website, it serves over 700,000 clients through 124 offices throughout Mexico. The organization supports Mexico’s working class citizens and has issue over 2 million loans. The company employs approximately 6,000 employees.

Jose Luis Rion, the controlling shareholder and president of the board, will experience a reduction in his company stake from 68.8 percent to 54.9 percent if all 136 million shares are exercised. United Kingdom’s HSBC, which last year acquired a stake in the company, will experience a reduction in stake from 19.99 percent to 18.68 percent. Financiera Independencia’s IPO follows the Banco Compartamos offering covered in a MicroCapital.org article in May 2007. Banco Compartamos, another Mexico-based MFI, offered 30 percent of its assets to stock markets in both New York and Mexico City in April 2007 raising USD 467 million.

Financiera Independencia shares will trade under the ticker symbol FINDEP.MX on the Mexican Stock Exchange.

Additional Resources:

Symbiotics:

http://www.symbiotics.ch/en/latest_news.asp?id=b676

CNNMoney: http://money.cnn.com/news/newsfeeds/articles/djhighlights/200711011524DOWJONESDJONLINE001035.htm

Financiera Independencia: http://www.independencia.com.mx/

MicroCapital.org article, May 1, 2007: “Breaking the Mould: Mexican Banco Compartamos Drags Microfinance into a Controversial New Era Despite the Kicking and Screaming”

Microcapital.org article, October 19, 2007: “NEWS WIRE: Mexico: Microfinance Institution Independencia Plans IPO This Year”

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