I&M is to raise Sh750 million from ordinary shareholders who will be
offered new shares at a price that was yet to be determined as of
Friday. PHOTO/FILE
European
development finance institutions Proparco (French) and DEG (German) are
set to raise their stakes in I&M Holdings from the current 10.68 per
cent in an upcoming rights issue by the banking group.
The
funds will be given an opportunity to inject more funds into the
business in the Sh1.5 billion cash call that will be offered in three
installments.
“The stake of the DFIs could go up in the capital raise,” said Gauri Gupta, the I&M general manager for corporate advisory.
Their
actual stake will depend on the uptake of the rights issue whose timing
will also determine if the funds will still be shareholders in the
Nairobi Securities Exchange-listed firm.
UK development
finance institution CDC Group has received regulatory approvals to buy
all the shares held by DEG and Proparco in I&M.
If
the buyout is completed before the cash call, it is CDC which will be
seeking to raise its stake from the 10.68 per cent it will have acquired
from the two funds.
I&M is to raise Sh750 million
from ordinary shareholders who will be offered new shares at a price
that was yet to be determined as of Friday.
Another
Sh600 million is to be raised specifically from the development finance
institutions (DFI), giving them an extra investment opportunity that is
expected to raise their ownership in the company.
“Issue
of new shares to DFI shareholder/(s) on such terms and conditions as
may be determined by the directors for up to an amount not exceeding 40
per cent being Sh600 million of the entire proposed capital raise
amount,” I&M said in a notice ahead of its recent extraordinary
general meeting.
The company will also seek to raise Sh150 million from trustees of its employee share ownership plan (ESOP).
The
fundraising comes at a time when I&M is keen expanding its business
in the region through acquisitions and greenfield ventures.
I&M
recently sought shareholders’ approval to empower the board of
directors to authorise an acquisition, a merger, a joint venture or a
new venture whose value does not exceed 15 per cent of the company’s
total assets.
The company recently acquired a 65 per
cent stake in corporate advisory firm Burbidge Capital and is on course
to complete its full buyout of Giro Commercial Bank.
I&M
had also planned to buy an 80 per cent stake in Uganda’s Orient Bank
but the deal collapsed after the owners, Nigeria’s Keystone Bank, opted
to sell to London-based private equity firm 8 Miles LLP.
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