I&M Bank Rwanda raises Sh887.4m in cash call

An I&M Bank branch in Kigali. FILE PHOTO | CYRIL NDEGEYA

By OTIATO GUGUYU
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Summary

• The lender offered a rights issue to existing holdings at one new share for every five ordinary shares on a discount to the market price of 39.6 Rwandese Franc (Sh4.4) , raking in applications for 225,584,700 shares, a 12 percent oversubscription.
• The rights issue was undertaken to secure long-term funding to accelerate investment in technological platforms and bolster the Bank’s Tier 1 Capital Adequacy Ratio.

I&M Bank Rwanda raised Sh887.4 million through a cash call, marking a 112 percent subscription for its 200 million share rights issue in October.

The lender offered a rights issue to existing holdings at one new share for every five ordinary shares on a discount to the market price of 39.6 Rwandese Franc (Sh4.4) , raking in applications for 225,584,700 shares, a 12 percent oversubscription.

The rights issue was undertaken to secure long-term funding to accelerate investment in technological platforms and bolster the Bank’s Tier 1 Capital Adequacy Ratio.

Ms Rina Hicks, Chief Operations Officer at Faida Securities Rwanda—which was the joint lead transaction advisors for the I&M Bank (Rwanda) rights issue--said the cash call was buoyed by the lender’s strategy to increase lending to Micro, Small and Medium-Sized Enterprises and enhance efficiency through digital banking.

“I&M Bank Rwanda has a track record of offering high return on average equity and is a strong dividend counter,” she said.

East African firms are facing hard times in raising capital from the regional markets as lenders are hesitant to explore corporate bonds due to defaults.

Kenya has only five listed corporate bonds, among them East African Breweries Ltd, Chase Bank, Real People, Family Bank and Acorn Green bond.