, NAIROBI, Kenya, Jun 19 – Diamond Trust Bank (DTB) Kenya intends to raise Sh3.63 billion in fresh capital, following the approval of its Rights Issue by the Capital Markets Authority (CMA) and Nairobi Securities Exchange (NSE) on Tuesday.
This followed approval obtained from the bank’s shareholders, at an extraordinary general meeting held on 4 March 2014.
Through the rights issue, DTB intends to offer 22 million additional shares at a rights price of Sh165 per share representing a 32 percent discount of over the bank’s share price, which traded at Sh244 at the bourse on Wednesday.
The rights issue will be launched on 30 June 2014 and will run until 25 July 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.
The Bank’s Managing Director Nasim Devji expressed confidence that the Rights Issue, which is being offered in the ratio of one new share for every 10 shares held presently, will be strongly supported by the bank’s shareholders.
“The Board resolved to offer the Rights at an attractive discount over the prevailing market price, given the unyielding support and unwavering loyalty demonstrated by the shareholders, which has seen DTB’s operations grow from strength to strength across Eastern Africa in recent years,” Devji said.
Devji advised that the additional capital raised will play a key role to fund future asset growth, investment in the branch network and alternative channels in Kenya, as well as strengthen the Group’s presence in East Africa, through additional investments in DTB’s subsidiaries in Tanzania, Uganda and Burundi.
It will also enable the bank to explore future investment opportunities in other new markets in the region.
“The proposed Rights Issue accords the shareholders with the opportunity to increase their investment in DTB and continue to benefit from its growth,” Devji said.
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 over-subscribed- raising additional capital of Sh4.1 billion in the 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.