Jamii Bora merges shares ahead of listing on small companies’ board

Jamii Bora Bank CEO Samuel Kimani. Photo/FILE  Nation Media Group

By John Gachiri

Jamii Bora Bank plans to consolidate its shares ahead of the planned listing on the Nairobi Securities Exchange (NSE) next year.

The bank has filed an application in court to merge its two-tier shareholding into a single class as per legal requirements.

“We are going to list on the GEMS (Growth Enterprise Market Segment) next year so we want to consolidate the shares,” said Jamii Bora legal affairs head Fred Chumo told the Business Daily.

The micro lender’s Sh2.34 billion share capital is divided into 5.6 million ordinary shares valued at Sh250 each and 15.6 million class A ordinary shares valued at Sh66 each.

The consolidation plan will see the ordinary shares replaced by the class A ordinary stocks on a one-for-one basis. The law also requires companies to notify the court when the shareholders pass resolutions to reduce the capital to ensure the changes are not effected to evade tax obligations.

Jamii Bora is recruiting transaction advisers, accountants and related consultants for the listing process.

“We are sending the requests for proposals this month so that we can appoint the advisers in the next quarter,” said Mr Chumo.

Previously the bank had said that its shares would be traded on Standard Investment Bank’s overt-the-counter (OTC) platform, but has now opted for the GEMS which has less stringent listing rules than the other segments.

Standard Investment Bank in the meantime is helping the bank raise Sh1 billion through a five-year bond that has a 13.3 per cent coupon rate with interest payable twice a year.

(Read: Jamii Bora issues Sh1bn bond to fund mortgage loans)

The bond will be traded on the OTC market, jointly by Standard Investment Bank and Faida Investment Bank, which is also the joint transaction adviser in the deal.

The bond sale which opened on Monday tranches of Sh1 million each and closes on August 14.

Results of the offer will be made on August 16 and trading is expected to begin on August 26. An abridged prospectus on the offer says that the micro lender has set 40 per cent or Sh400 million subscription rate for the issue to be declared a success.

The Africa Guarantee Fund, an arm of the Africa Development Bank will back 50 per cent of the bond.

“We also have a loan product to assist potential investors buy into the bond,” Jamii Bora chief executive Samuel Kimani told the Business Daily.