Credit Bank chief executive Betty Korir. FILE PHOTO | NMG
The Sh1 billion deal between private equity firm Oikocredit
International and Credit Bank appears to have collapsed almost a year
after the two institutions started negotiations.
Dutch private equity fund Oikocredit last year announced a plan to take 22.8 percent stake in Credit Bank for Sh1 billion.
“Oikocredit
and Credit Bank were confident that they would come to a final
agreement and disbursement. However, in late 2019, the deal was not
pursued further,” Ulrike Haug, communications manager of Oikocredit told
the Business Daily last week.
Although the firm said
it was not at liberty to disclose information on why the deal was not
finalised, it said “in general international finance arrangements are
complex by nature and at times result in unforeseen outcomes. We confirm
that the fate of the deal is not related to the allegations against the
bank’s CEO recently published in Kenyan media,” Oikocredit said in
response to media queries.
Last month, Credit Bank
chief executive Betty Korir was summoned to the Directorate of Criminal
Investigations to provide more information on a financial deal involving
Sh200 million after an anonymous whistle-blower associated the deal to
money laundering.
The two institutions signed a non-binding term sheet for an
equity investment in August 2019, after which they announced the
anticipated equity investment via a joint press release in which the
social impact investor was to provide a Sh1 billion equity investment.
Following
delayed conclusion of the deal, the bank has been holding discussions
with various investors as it seeks capital injection so that to sustain
its growth.
Credit Bank is a privately owned lender whose majority shareholder is former Finance minister Simeon Nyachae.
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