By DAVID HERBLING
The National Social Security Fund (NSSF) and the government have committed to participate in National Bank’s plan to raise more than Sh10 billion in a cash call next year.
The bank’s chief executive, Munir Ahmed, said the
cash call, which will take place in the first quarter of next
year, had the blessing of the two principal shareholders who have a combined stake of 70 per cent.
year, had the blessing of the two principal shareholders who have a combined stake of 70 per cent.
This means that the government will inject Sh2.2
billion and NSSF Sh4.8 billion in the bank through a fundraiser that has
dimmed plans to sell a majority stake in the lender to a strategic
investor.
“The major shareholders are committed to making
this rights issue a success. Remember, they are represented on the board
so they are part of the decision,” said Mr Ahmed in an interview with
the Business Daily.
“We do not need a strategic investor since our
shareholders can raise the required capital. We also have the necessary
expertise,” added Mr Ahmed who was appointed from Standard Chartered to lead the bank eight months ago.
NSSF dominates NB’s 10-member board. Three seats
are occupied by the bank’s executives including Mr Ahmed and his two
deputies with NSSF managing trustee Peter Odongo, and the permanent
secretary to the Treasury, representing the principal shareholders.
Five directors; Francis Atwoli, Mohammed Hassan,
Erastus Mwongera, Sylvia Kitonga, and Wangui Mwaniki sit on the board
courtesy of NSSF.
The fund argued strongly against plans to sell the
bank to a strategic investor as designed by the Privatisation
Commission. In 2008 the Cabinet approved the sale of government and NSSF
shares in the bank in two phases.
The first phase involved selling 25 per cent of NB
shares held by NSSF to a strategic investor. The second phase would
see the sale of 17 per cent of shares held by the government and 23 per
cent held by NSSF to the public.
The State owned pension fund is said to support
the rights issue route and strengthening of management, which started
with the hiring of Mr Ahmed, over the share sale.
“Raising additional capital is part of a strategic
programme developed with the advice of McKinsey consultants,” said Mr
Ahmed. “We need additional capital to grow the bank to top-tier status
by 2017.”
This is the bank’s first rights issue since
listing at the Nairobi bourse in 1994 and will see the bank issue up
to1.12 billion shares, which is four-times the 280 million shares
available for trading at the NSE.
Its share has gained 2.44 per cent over the past
year to Sh21 in a period that has seen all banks record double-digit
appreciation of their stocks.
Ranked number 12 out of 44 lenders in Kenya, the
bank dropped from a top-three lender in 1996 as its model of focusing on
government banking and personal lending was upset by newer, nimbler
rivals like Equity Bank.
No comments :
Post a Comment