NIC Bank Rights Issue oversubscribed by 121pc

December 11, 2014
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NIC Bank Group Managing Director John Gachora says the money raised will be used to diversify the bank's business portfolio as it looks to roll out its ambitious growth strategy in the New Year with a focus on SME, corporate and retail customers/FILE
NIC Bank Group Managing Director John Gachora says the money raised will be used to diversify the bank’s business portfolio as it looks to roll out its ambitious growth strategy in the New Year with a focus on SME, corporate and retail customers/FILE
NAIROBI, Kenya, Dec 11 – NIC Bank has announced a 121 percent oversubscription of its third Rights Issue which targeted to raise Sh2.1 billion to boost capital and grow its retail and Small and Medium Enterprises business.

The Rights Issue raised Sh4.6 billion.

NIC Bank Group Managing Director John Gachora says the money raised will be used to diversify the bank’s business portfolio as it looks to roll out its ambitious growth strategy in the New Year with a focus on SME, corporate and retail customers.

The bank had offered a total of 42.6 million new shares at a discounted price of Sh49.25 per share on the basis of one new share for every 14 ordinary shares held.

The listing of the new shares and dispatch of payment of refunds through Electronic Funds Transfer will be done on December 18.

“We are pleased with the outcome of the Rights Issue. Its success is a welcome vote of confidence by shareholders on the bank’s long-term strategy. The money raised will help us focus on continued growth in the coming years as we continue to invest in Kenya and the region,” said Gachora.

This was the bank’s third successful Rights Issue in seven years having raised Sh1.1 billion in 2007, which was oversubscribed by 49 percent.

In August 2012, NIC Bank successfully raised a further Sh2.1 billion, which was oversubscribed by 238 percent.

Capital from previous issues was used to upgrade the bank’s core banking platform, expand in the region and to open new subsidiaries. The Rights Issue is part of a major debt and equity capital-raising programme initiated by NIC Bank earlier this year.

A Medium Term Note issued by the Bank received offers of Sh6.5 billion and was upsized to Sh5.5 billion from the original Sh3 billion.

This was the first tranche under a Sh8 billion bond program. The bank listed and started trading its Sh5.5 billion bond at the NSE in September.

“We remain optimistic that we will continue on this growth trajectory into the New Year. Our focus going forward will be to penetrate the Retail and SME markets as well as increase our footprint in the region,” said Gachora.

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