HF rights issue oversubscribed by 3 pc

July 7, 2008
Shares

, NAIROBI, July 7 – The just concluded Housing Finance rights issue has recorded a 3% over subscription.

The company raised Sh2.37 billion, representing a 103 percent subscription, to successfully complete a move to recapitalise its property financing and development business.

The mortgage firm was seeking to raise Sh2.3 billion through issuance of an additional 115 million shares.

Housing Finance (HF) Managing Director, Frank Ireri said as a result, all shareholders would receive 100 percent allocation on their initial allotment and 70 percent on any application for additional shares.

Ireri said he was pleased with the positive response to the rights issue which he termed as a reflection of the confidence shareholders had in the company’s future.

"Housing Finance has an expansive business plan and the cash received from the rights issue will enable the firm to execute its ambitious five years strategic plan," said Ireri.

He noted that with an additional Sh2.3 billion of capital in the bank, HF was now  able to work on leveraging the company’s balance  sheet to take on up to Sh25 billion of additional deposits. 

Both small and large shareholders such as Equity Bank, British American Investments Limited and NSSF applied for their rights in full. 

The decision by the Government not to take up its rights gave impetus for small shareholders to take up additional shares that had been renounced and traded at the bourse. The Government had indicated that it would not participate in the rights issue as part of its divestiture program.

According to lead stock brokers, CFC Financial Services and Standard Investment Bank, the slow refund of Safaricom IPO cheques may have affected several shareholders who sought to take up their allotments but ended up renouncing them citing unavailability of funds to reinvest in Kenya’s leading mortgage lender.

Electronic crediting of CDS accounts with new shares arising from the rights issue will take place on July 10th and commencement of trading of new shares at the Nairobi Stock Exchange will take place on July 11.

Ireri said refund cheques would be available through the authorized agents with whom the PAL was submitted, beginning July 14.

"The rights issue will go a long way in positioning HF as the financial enabler for the property industry across the whole value chain through growth in provision of mortgages, contributing to the supply of affordable housing; spearheading appropriate product development for the informal sector and middle to low income earners as well as financing and facilitating developers and buyers of property," Ireri said.

Shares

Latest Articles

Stock Market

Most Viewed