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Kenya

Coop Bank to launch IPO

NAIROBI, August 13 – The Cooperative Bank announced Wednesday that it would be listing its shares at the Nairobi Stock Exchange (NSE) in two months time.

The Bank’s Managing Director Gideon Muriuki said they have settled on October 20 as the day the Initial Public Offer (IPO) will be launched.

He said the bank is currently sourcing for the IPO’s Lead Transaction Advisors and Sponsoring brokers who would be known by Friday.

“The appointed transaction advisors will particularly advice on the offer price of the share and the other listing requirements,” he said.

The bank will then submit the formal request of the prospectus and other requirements to the Capital Markets Authority (CMA) and NSE.

Cooperative Bank is seeking to raise at least Sh10 billion to help increase its loan portfolio and expand its branch network in the country.

“Listing of the shares will notably unlock value for the shareholders and provide pricing and transfer mechanism,” Muriuki said at a press conference on Wednesday.

He said the Bank’s shareholders had approved the subscription at a special General Meeting held on June 27th.

Muriuki said the bank plans to reserve 100 percent of the shares listed to local investors “because Kenyans have demonstrated a will to invest’.

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“The board has approved that there be an allocation criteria, subject to CMA approval, that will ensure that ordinary Kenyans are the major beneficiaries of the share offer, with a minimum guaranteed allocation,” he said.

As part of the preparations to list its shares at the NSE, the bank has changed its legal status from a cooperative Society to a Limited liability company.

It got approval from the Central Bank of Kenya (CBK) to transfer its business assets and liabilities from its current status of a Cooperative Bank of Kenya Limited to a limited liability company.

The shareholders meeting, he said, also approved a new governance and shareholding structure.

Under the new structure, Coopholding Cooperative Society Ltd (formerly class ‘A’ Shares) will constitute 77 per cent while individual members (formerly Class ‘B’ shares will constitute 23 per cent shareholding.

With that kind of structure, Coopholding Cooperative Society Ltd will be allocated the entire shareholding previously held by the 3, 805 cooperative societies countrywide, making it the strategic investor and majority shareholder in the bank.

Muriuki said the institute will however retain its identity as ‘Co-operative Bank’.

The over 51,000 individual shareholders (formerly Class ‘B’) have been allocated a similar number of shares in the new bank.

With the additional shares to be issued under the IPO, shareholders are projecting that Coopholding Co-operative Society Ltd will get 62 per cent while the others will get 38 per cent.

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The bank is currently undertaking a major expansive programme aimed at increasing its retail customer base.

It intends to open 20 more branches before the end of the year in Buru Buru, Westlands, Ongata Rongai, Tom Mboya, Upper Hill, River Road, Embakasi, Zimmerman and an additional one in Industrial Area.

Other branches are set to open in Kangemi, Nkubu, and an additional one in Nakuru, Isiolo, Kapsabet, Voi, Nanyuki, Narok, Siakago, Malindi, Juja, Garissa, Mariakani, Busia, Gilgil, Kitui, Siaya and Tala.

“The bank’s ATM network has also expanded to 152 and over 20 more expected before the year end,” Muriuki said.

The bank is projecting a pre-tax profit of about Sh3.2 billion this year, up from the Sh2.3 billion loss recorded last year.

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