Proceeds of the Rights Issue which closes on Friday, November 14, will be used to accelerate the bank’s expansion plans which include new branches and regional expansion as it eyes a larger slice of the East African cross-border financial market.
NIC is offering a total of 42,663,040 new shares at Sh49.25 each, on the basis of one new share for every 14 ordinary shares that were held on the register by Thursday, October 2, 2014.
The bank received approval from the Capital Markets Authority (CMA) to raise the money on September 24 this year.
“This is a significant milestone for us as we prepare to take NIC Bank to the next growth level both in Kenya and the region. We believe the issue will be successful and will help us to focus on continued growth in the coming years with more focus on deal-making opportunities in Kenya and the region,” NIC Bank Group Managing Director John Gachora said.
This is the bank’s third rights issue in seven years. In 2007, NIC raised Sh1.1 billion through a Rights Issue, which was 49 percent over-subscribed.
In August 2012, NIC Bank successfully raised a further Sh2.1 billion through a Rights Issue which was over-subscribed by 238 percent.
In August of this year, shareholders allowed the lender to raise additional capital via debt and equity. In September, the bank listed and started trading its Sh5.5 billion bond at the NSE.
The Medium Term Note received offers of Sh6.5 billion and was upsized to Sh5.5 billion from the original Sh3 billion. This was the first tranche under the Sh8 billion Medium Term Note Program.
NIC Capital Limited, a subsidiary of NIC Bank Group, is the lead arranger for the transaction while NIC Securities is the sponsoring brokerage firm.
The bank has over the last six years established a presence in Tanzania and Uganda.