Stanchart rights begin trading at Kenyan bourse

September 7, 2010
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, NAIROBI, Kenya Sep 7 – Standard Chartered Bank\’s Rights Issue begun trading at the Nairobi Stock Exchange on Tuesday, as it seeks to raise Sh2.5 billion.
 

The bank will sell 15,109,323 new shares, by way of rights, valued at Sh165.45 marking a 22 percent discount of a six-month share price average.
 
According to First African Capital Chief Executive Officer, Wanjiku Mugane the offer will close on September 28 with the new shares expected to begin trading at the NSE on October 29.
 
Proceeds from the Rights Issue will be used to purchase Barclays Bank of Kenya\’s custody business as part of an African-wide pursuit by the group for the custody business spread across eight countries on the continent including Botswana, Ghana, Kenya, Mauritius, Tanzania, Uganda, Zambia and Zimbabwe.
 
The Rights Issue will be on the basis of one new share for every 18 shares held.
 
Speaking at the official opening, StanChart Chief Executive Richard Etemesi said the acquisition of the custody service business will help the bank develop its wholesale banking offering.
 
"Our strategy is to have a security services franchise that spans Africa, Asia and the Middle East giving us unique coverage in these three major regions," Mr Etemesi said.
 
The bank has over the past year been aggressively developing its consumer banking which was key to its 21 percent growth in profit before tax in 2010 at Sh4.1 billion.
 
The transaction is part of an African-wide pursuit of the bank for the Barclays custody business spread across eight countries on the continent.
 
StanChart Chairman Wilfred Kiboro said part of the proceeds of the issue will be used to shore up its authorised share capital to Sh1.7 billion from the current Sh1.4 billion providing a new source of liquidity for the bank.
 
"This Rights Issue has been necessitated by the need to raise the equity to purchase the Barclays Custody Services business as well assist the bank to continue to grow its business and continue offering services to its customers," Mr Kiboro said.
 
Mr Kiboro said the Barclays Custody Business is a successful pan-African securities and custody business consisting of direct custody capabilities in African markets. He said the move puts the bank in a unique position to provide sustainable annuity income from client that transfer from BBK.

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