The Ministerial Committee of the Central African Monetary Union (UMAC) adopted a regulation on 7 October in N'Djamena that will remove, from 1 November, the 20 billion CFA franc cap applicable to private placements in the six CEMAC countries.
Regulation number 03 amends four articles of the regional text of 2022. It will apply in Cameroon, the Central African Republic, Congo, Gabon, Equatorial Guinea and Chad.
According to the provisions detailed by Cameroonian economic news outlet EcoMatin, an issue may now be offered to fewer than 100 qualified investors, compared with a previous maximum of 40. The minimum subscription is set at 10 million CFA francs per investor, whereas the former regime required a nominal value of at least 50 million CFA francs for each security.
The subscription threshold applies to each investor's holding, while nominal value refers to the unit amount of the security. The easing therefore concerns two different parameters and keeps private placements within the circle of qualified investors.
Lifting the cap may allow companies and other issuers to seek larger financing without launching a public offering. The regulation nonetheless keeps each transaction registered with COSUMAF and limits a single issuer to two private placements over a rolling 24-month period.
Resale of securities will be permitted between qualified investors, including where the buyer did not take part in the initial issue. Transactions must go through a dedicated compartment of the Central African Securities Exchange.
The framework also opens the market to issuers based outside the CEMAC, subject to compliance with foreign exchange regulations. Accelerated procedures are provided for those from jurisdictions linked to the BEAC or COSUMAF through a cooperation agreement.
The UMAC presents the reform as a response to rising financing needs and pressure on public finances.