Money Markets
By DAVID HERBLING
In Summary
- Equatorial Commercial Bank in a notice said it is offloading Equatorial Fidelity Centre, valued at Sh414.5 million, to Fidelity Shield where it owns a 23.86 per cent stake.
- The high-end office block, located off Wayaki Way in Nairobi’s Westlands district, has been serving as the corporate headquarters for both ECB and Fidelity Shield.
- The bank said the transaction will be completed by the end of the year.
Equatorial Commercial Bank (ECB) has transferred its
prime office complex to Fidelity Shield Insurance as it prepares to sell
a 51 per cent stake to Mwalimu Sacco.
ECB, majority-owned by billionaire Naushad Merali, in a
notice said it is offloading Equatorial Fidelity Centre, valued at
Sh414.5 million, to Fidelity Shield where it owns a 23.86 per cent
stake. The two firms share directors.
Mwalimu Sacco chief executive Robert Shibutse
served as a director at Fidelity Shield Insurance and previously sat on
the board of ECB.
Businessman Abdulali Kurji, who owns Meridian
Hotel, serves as a non-executive director at both ECB and Fidelity
Shield. The bank said the transaction will be completed by the end of
the year.
The high-end office block, located off Wayaki Way
in Nairobi’s Westlands district, has been serving as the corporate
headquarters for both ECB and Fidelity Shield.
“Notice is hereby given under the Transfer of
Business Act Cap 500 that the property rental business of Equatorial
Commercial Bank Ltd at the commercial building known as Equatorial
Fidelity Centre will be transferred on or about December 31, 2014
to Fidelity Shield Insurance Ltd,” ECB said in a notice last Friday.
Efforts to reach Mr Shibutse to comment on the sale were unsuccessful as he did not respond to our calls and text message.
The prime commercial building was a source of
rental income for ECB and its disposal will see Mwalimu Sacco acquire a
bank with less assets.
ECB, in its latest annual report, revealed that it
had placed Equatorial Fidelity Centre in the market for sale but did not
disclose the reason.
“This property has been placed on the market and sale is expected within the 2014 financial year,” ECB said in its 2013 report.
The asset transfer comes at a time when Mwalimu
Sacco is in talks to acquire a 51 per cent stake in ECB in a deal valued
at about Sh2.5 billion. The plan to dispose of the property is the
latest twist in the tale.
Recently, the Sacco Societies Regulatory Authority (Sasra) regulator and the government opposed the deal.
ECB last week held an extraordinary general meeting
(EGM) to clean up its share register ahead of ceding a majority stake
to the giant teachers’ credit union.
The meeting saw shareholders approve a proposal to
convert 600 million special class ‘‘A’’ shares into 120 million ordinary
shares as part of a plan to make ECB’s shareholding open and simplify
the transaction.
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