NAIROBI, Kenya, Aug 11 – The Capital Markets Authority (CMA) has given Standard Chartered Bank the green light to raise Sh2.5 billion through a Rights Issue.
The issue will see an additional 27 million shares created and upon floatation will raise the bank’s authorised share capital to Sh1.78 billion.
“We are delighted to have received CMA’s approval to go ahead with the rights issue. I now call upon our shareholders to exercise their rights as we enter this new and exciting phase of our growth plan,” said Managing Director Richard Etemesi.
The Rights Issue was approved by the shareholders at an Annual General Meeting (AGM) held on May 28, this year and lead advisors for the process have already been appointed.
Standard Chartered Securities are the Lead Transaction Advisor and Standard Investment Bank will be the Sponsoring stockbrokers for the Issue planned to open on September 7. Standard Chartered Bank is the Receiving Bank while Hamilton Harrison & Mathews Advocates are the Legal Advisors.
The proceeds realised from the Rights Issue will be used to purchase the custody services business from Barclays Bank of Kenya (BBK) as part of the wider acquisition by Standard Chartered PLC of Barclays Bank PLC custody business in Africa.
“The custody business will form part of Standard Chartered Bank’s build up of Africa custody business as a whole. It will give the bank new products that it can offer to clients domestically, sustainable annuity income from the clients that transfer from BBK, a new source of deposit liquidity and the opportunity to build relationships with regional and international investors who invest in Kenya,” said Mr Etemesi.
The money will also enable them to grow their business and provide better services to their customers.
“With the acquisition of this additional business, we are confident that the bank will be in a position to deliver better performance in the coming years,” added the CEO.
The Stanchart transaction comes hot on the heels of the conclusion of the Kenya Commercial Bank Group’s rights issue where it managed to raise Sh12.45 billion against a target of Sh15 billion.
TPS Serena is also set to launch its Sh1.2 billion issue on Thursday in the market that has been abuzz with such transactions which many corporates view as an ideal avenue to raise cheaper capital for their growth and expansion.