NAIROBI, Kenya, Jul 20 – The Capital Markets Authority (CMA) has approved NIC Bank’s Sh2.07 billion Rights Issue.
The approval by the market regulator comes after shareholders okayed the Rights Issue during this year’s Annual General Meeting held on May 2.
“This is a significant milestone for us as we prepare to take NIC Bank to the next growth level,” NIC Bank Group Managing Director James Macharia acknowledged.
“This key development allows our shareholders to inject additional capital in order to be part of this growth,” he added.
The funds raised through the Rights Issue will give NIC Bank the required financial strength necessary to pursue both its local and regional expansion activities including its recent entry into Uganda.
NIC Bank Group is now present in Uganda (NIC Bank Uganda) and Tanzania (NIC Bank Tanzania) and aims to tap into the numerous opportunities arising from the regional convergence of markets and economies under different trade agreements.
The funds raised through the Rights Issue will also be used to invest in a state-of-the-art technology platform T24, provided by Temenos.
T24 is a complete front to back office, customer relationship and product lifecycle management software platform that powers retail, corporate, wholesale, universal and private banking operations and will enable the bank to deploy and control a flexible range of multi-channel, next generation banking services efficiently, securely, cost effectively and profitably.
“The shareholders have anxiously been waiting for this milestone and we are glad that the approval process has been expeditiously completed by the CMA,” Macharia said.
NIC Bank will issue 98,724,391 rights to purchase New Ordinary Shares at an Offer Price of Sh21 per share, which is a 43 percent discount from the latest price of NIC Bank on the Nairobi Securities Exchange (NSE) as of July 18.
The rights will be issued in the ratio of one New Ordinary Share for every four Ordinary Shares held.
Shareholders in the register as of July 30 will be entitled to participate in the Rights Issue.
The trading of the rights on the NSE will commence on August 27 and end on September 7 and the Rights Issue will close on September 14.
The holders of the new shares will be entitled to receive additional bonus shares in the ratio of one bonus share to every ten New Shares after the rights issue.
This means that for every 10 new shares applied for and allotted, shareholders will be entitled to receive one additional bonus share subject to the CMA’s approval of the proposed bonus issue.
NIC Bank has recorded significant growth over the last five years as the bank’s pre-tax profit has increased by an annual average growth rate of 36 percent, from Sh1.1 billion in 2007 to Sh3.6 billion reported in 2011.
NIC Bank’s balance sheet has also grown considerably with total assets of Sh79 billion as of December 31, 2011.