The Competition Authority of Kenya (CAK) has given Chike Africa the greenlight to buy all the shares of Real People. FILE PHOTO | FOTOSEARCH
A Mauritius-based private investment firm has been given the nod to fully acquire troubled microfinance Real People, even as bondholders of the microlender took a massive haircut on their Sh1.3 billion capital.
The Competition Authority of Kenya (CAK) gave Chike Africa the greenlight to buy all the shares of Real People, a move that saw the target firm’s South African parent company Real People International Holdings exit from the credit-only microfinance.
Real People, in 2015, issued a Sh1.63 billion corporate bond and the proceeds were expected to further boost the company’s lending capacity in the Kenyan market.
The company, however, misappropriated the funds by wiring it to its South African parent firm, leading to a default on the outstanding sum of Sh1.3 billion owed to bondholders.
In 2021, Real People told investors that, as part of its plans to inject $6 million (Sh755.4 million) into micro financier, Chike Africa had proposed a 70 percent haircut on the principal amount covering the first part of the issue amounting to Sh267.1 million.
“In exercise of the powers conferred by section 42(1) of the Competition Act, 2010, the Competition Authority of Kenya excludes the proposed acquisition of sole control of Real People Kenya Limited by Chike Africa Limited from the provisions of Part IV of the Act,” said CAK acting director-general Adano Wario.
The regulator said it excluded the merger from the antitrust clause because it found that it would not affect competition negatively.
“The combined value of assets, which is higher than the turnover, for the preceding year, 2021 was Sh579,951,000 and the transaction meets the threshold for exclusion provided under the Competition (General) Rules, 2019,” he added.
→ dakure@ke.nationmedia.com
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