The group now holds 4.55 BTC, as part of a programme to build long-term wealth for shareholders.
Africa’s first listed bitcoin treasury company Africa Bitcoin Corporation (ABC) has acquired a further 1.35 bitcoin (BTC), bringing its total haul to 4.55 BTC – currently valued at around R4.7 million.
The average price paid for the latest acquisition was R1.14 million, slightly above the current price of R1.07 million.
It’s a small beginning, but the company plans an aggressive scale-up its BTC acquisitions along the lines of Michael Saylor’s Nasdaq-listed Strategy, which has accumulated more than 730 000 BTC, much of it funded with debt and the issue of new equity.
Another company embracing bitcoin is Metaplanet, a Japanese hotel operator and real estate developer that reoriented its business to bitcoin as a primary reserve asset, after facing a life-threatening business collapse during the Covid-19 period.
It started acquiring BTC in 2024, prompting a massive and volatile rerating of its share price, which is now up 300% over five years.
Long-term strategy
ABC chief executive Warren Wheatley previously told Moneyweb that this kind of volatility should be expected by any company pursuing a bitcoin reserve strategy.
ABC’s share price is thinly traded and has been noticeably less volatile than the bitcoin price.
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While Strategy is viewed as a leveraged play on bitcoin, ABC’s relatively small balance sheet does not appear to be impacted by BTC price movements.
Through a subsidiary, the company also announced an agreement to issue R100 million in debt as part of a R5 billion domestic medium-term note programme intended to fund its long-term acquisition of BTC. The 10-year notes will be listed on the Cape Town Stock Exchange.
ABC says the recent acquisition was funded through a R1.5 million debt facility from a bank and available cash.
The company plans to accumulate additional bitcoin as part of a programme to build long-term wealth for shareholders, alongside its core SME lending and advisory business.
Last month, ABC appointed US investment bank Maxim as its advisor for investment banking and general financial advice. Maxim will be allocated 4% of the company’s shares, to be issued in tranches, at R11 a share.
The company’s strategy is to build an iron-cast balance sheet backed by bitcoin, that can withstand the inevitable erosion in the value of fiat currencies, while assisting SMEs in Africa through financial support and advisory services.
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Understanding ‘sats per share’
One of the key objective of bitcoin treasury reserve companies is to increase BTC holdings relative to the number of shares in issue. This is known as “sats per share” (there are 100 million satoshis in each bitcoin).
Strategy has made extensive use of convertible debt to increase its BTC holdings, while Metaplanet has issued zero-interest bonds and moving-strike warrants to increase bitcoin holdings relative to the number of shares in issue.
Where other companies use surplus capital to buy back shares, bitcoin strategy companies prioritise BTC purchases as a more effective way to increase long-term shareholder wealth.
ABC currently shows a yield of about 40 sats per ordinary ABC share, which is tiny compared with Strategy’s 200 000 sats per share, and Metaplanet’s 2 400 sats per share.
This article was republished from Moneyweb. Read the original here.
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