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Kenya

Britak shares to delay trading by a week

NAIROBI, Kenya, Sep 1 – British American Investments Company Limited has delayed the formal commencement of trading its shares on the Nairobi Stock exchange that was initially scheduled for Friday.

Group Chief Executive Officer Benson Wairegi said the delay to September 8 follows logistical challenges as some key guests were unavailable on September 2.

He however said the delay was no cause of alarm for investors adding everything was in order.

“We have completed the allotment of the shares and crediting the various CDS accounts.  Due to logistic issues regarding the launch event, we have rescheduled the launch to September 8,” Mr Wairegi said.

The company will be listing the shares on the Main Investment Market Segment of the NSE.

Last month, British American carried out an initial public offer seeking to raise Sh5.85 billion. However, reduced investor appetite saw the IPO undersubscribed managing to raise Sh3.5 billion by issuing 391 million shares representing a 60.09 percent subscription rate.

The company had initially sought to issue 650 million shares, which represented a 30.23 percent stake at a listing price of Sh9 per share.

Retail investors took 70.9 percent of the offer, employees 5.2 percent, foreign investors 0.3 percent while qualified institutional investors had a 23.7 percent of the subscription.

British American Investment is a holding company for two insurance firms in Kenya and Uganda and an asset management business.  It is 37 percent owned by British American Mauritius while local investors own 63 percent.

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British American Investment will use the money raised to grow its business in the region as well as venture into real estate development.

However, the under subscription may force the company to review its expansion strategy as most of the projects were hinged on it reaching its Sh5.85 billion target.

It is understood that the company had budgeted Sh2.5 billion from the sale proceeds to go into a large-scale development of both commercial and residential units.  Another Sh1 billion was to be used for regional expansion into Tanzania, Southern Sudan and Rwanda, as well as propping up the Ugandan subsidiary.

A further Sh1.28 billion was to expand the firm’s core business in Kenya, and Sh750 million to offset outstanding debt.

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