By Alawi Masare,The Citizen Reporter
In Summary
- The church-owned bank wanted to raise Sh5 billion from its five million shares issued but managed to collect Sh3.7 billion which is equivalent to 75 per cent
Dar es Salaam. The Initial
Public Offering (IPO) issued by Mkombozi Commercial Bank last month has
been undersubscribed by 25 per cent as the bank is expected to list on
the Dar es Salaam Stock Exchange next week.
The church-owned bank wanted to raise Sh5 billion
from its five million shares issued but managed to collect Sh3.7 billion
which is equivalent to 75 per cent, according to Ibrahim Mshindo, DSE
acting chief executive officer.
“As we speak, we are in preparations of the listing on Monday, December 29, 2014,” he said.
The performance of the IPO was expected to go
beyond 100 per cent, but it was affected by the report and discussions
in Parliament about the escrow scandal.
Mkombozi Bank was accused of transferring money
from the Escrow account to some individuals including government
officials and religious leaders.
The IPO started on November 3 and ended on November 29 while the report was presented in the National Assembly on November 26.
“Many investors wait for the last week to make
decisions and that is the time the report was presented in Parliament.
It actually changed the sentiment,” said George Fumbuka, chief executive
officer of Core Securities, the sponsoring broker.
However, he said the 75 per cent success in the
IPO was a great achievement to the bank as it was enough to meet the
minimum capital requirement of Sh15 billion the bank wanted as directed
by the Bank of Tanzania.
The bank’s capital is now estimated at Sh16.8
billion after the IPO, said Mr Fumbuka. The bank wanted to raise the
required funds to reach the regulatory target and use the surplus to
enable the bank to tap into new areas of business, open more branches to
increase its outreach and, generally, expand its operations.
The listing of the bank on the DSE was expected on
November 22 but it was delayed pending some regulatory issues before
approval.
“There are some changes. For instance, nowadays,
brokers are supposed to prepare depository certificates which were
formerly done by the DSE. We have no experience in that and it
contributed to the delay,” said Mr Fumbuka. Mkombozi Bank will be listed
on the Entreprise Growth Market (EGM), an alternative listing window
with relaxed rules for small and medium-sized companies.
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