NAIROBI, Kenya, Jun 30 – Diamond Trust Bank (DTB) kicked off a Rights Issue on Monday, from which it targets to raise Sh3.63 billion to finance its expansion programme.
The bank will be offloading an additional 22 million shares to existing shareholders, priced at Sh165 each at the closure of the register on July 25, 2014.
All shareholders in the bank’s share register as at close of business on June 24 2014 will be entitled to participate in the Rights Issue.
Other investors interested in acquiring the rights may bid for them during the trading window which is expected to run from 2 July 2014 to 15 July 2014.
Speaking during the launch of the Rights Issue, the banks’ Managing Director Nasim Devji says the additional capital raised from the Rights Issue will be used to fund future asset growth and invest in the branch network and alternative channels in Kenya.
“We will be investing to build our asset base and realise our aggressive growth aspirations under our Vision 2020, we will do this by building up our wider network of domestic branches and innovative delivery channels as well as expanding outside our core East African market,” she said.
Devji says in the next seven years, the bank plans to expand its footprint to new frontier markets in Eastern and Southern Africa subject to successful completion of feasibility studies as well as shareholder and regulatory approvals.
The bank’s total numbers of branches stand at 103 across East Africa with plans to open 10 branches by the end of the year.
Last year, the bank’s share price rallied rising by 44 percent since June 2013 and by 27 percent in the last six months.
Between 2006 and 2012, DTB Kenya undertook three sets of Rights Issues – all of which were oversubscribed – raising additional capital of Sh4.1 billion in aggregate from the market.
DTB is an affiliate of the Aga Khan Fund for Economic Development (AKFED), the economic development arm of the Aga Khan Development Network.
Amongst the bank’s key shareholders are Habib Bank Limited and Jubilee Holdings Limited, both affiliates of AKFED, as well as the International Finance Corporation, the private lending arm of the World Bank.