NAIROBI, Kenya, Aug 5 – Family Bank has received shareholder approval to list at the Nairobi Stock Exchange during a specially constituted Extraordinary General Meeting as it seeks to discover the market value of its investment.
The bank’s shares will be listed on the bourse by way of introduction, meaning it will not be seeking to raise capital but placing its existing shares to trade amongst more players.
Going public however offers shareholders a liquid forum to unlock the value of their shares.
Family Bank had 242 million issued and paid-up shares at the end of last year that are currently trading over the counter at between Sh22 and Sh35.
Making the announcement, Family Bank’s newly appointed Chief Executive Officer Peter Munyiri said going to the bourse was in line with its strategic direction to become a major player in the regional market.
“If we got all the approval from Central Bank of Kenya, Capital Markets Authority and the Nairobi Stock Exchange we target to be listed by the close of October,” Mr Munyiri said.
The shareholders also approved the Employee Share Ownership Plan (ESOP).
Going public will see Family Bank join a growing rank of firms that are expected to enter the NSE this year.
Listing by introduction is particularly seen as the best route given the tight economic conditions that have dimmed enthusiasm for the previously favoured initial public offer.
Mr Munyiri said listing gives the bank additional options for fund raising. In the past, the bank has used private equity funds and private placement to raise investment funds.
“This gives us other avenues to tap into other revenue raising channels as we continue to grow the bank,” he said.
In its regional expansion, the CEO stressed that the bank would be seeking a slightly different approach to opening branches. Rather than take on the investment 100 percent, Mr Munyri said Family Bank would be going into the market with strategic partners from those countries.
This, he said, would reduce the bank’s exposure and ensure it is able to break even much faster.
“It does not make sense for us to go into the foreign market and own companies 100 percent because we must be sensitive to the people of that country, the direction we are likely to take is we move in on controlling stake (51 percent) and then we have other investors coming on board,” he said adding it would help with penetration.
Family Bank has two markets in its sight with the first stop likely to be Southern Sudan, which the CEO said, was a clear-cut decision.
In 2010, Family Bank unveiled a consortium of private equity firms as their new strategic investors, acquiring 22.31 percent stake in the bank. This pushed up its total shareholder funds by 97 percent from Sh1.6 billion in 2009 to Sh3.1 billion.