Kenya's StanChart bank rights issue oversubscribed
Standard Chartered Bank chairman Wilfred Kiboro and the bank’s corporate advisory and finance Africa managing director Wanjiku Mugane launch the financial institution’s rights issue at the Hilton Hotel, Nairobi on September 7, 2010.
Kenya’s Standard Chartered Bank’s $31 million (Sh2.5billion) rights issue has been oversubscribed by a massive rate of 161 percent.
The bank had offered 15.1 million shares at a price of Sh165.45 per new share and shareholders were entitled to an extra share for every 18 held. A total of 13.9 million new shares were accepted under the arrangement.
In addition, there were applications for 10.4 million new shares worth Sh1.7 billion.
A statement from the bank said all applications for 300 shares and below would be met in full. However, it added, those who applied for more would receive 4.18 percent of their bids above the 300 share limit.
The financial institution launched the rights issue, last month, in a move aimed at helping it increase its dominance in the three regional markets of Middle-East, Asian and Africa.
The Sh2.5 billion will be partly used to acquire the Africa custody business from its rival Barclays Bank, putting in its hold over Sh4 billion in assets management.
The London-based Standard Chartered Bank Plc, which owns 75 percent of StanChart Kenya, is to pay Sh3.6 billion to acquire the Africa custody business with the Kenya subsidiary paying Sh1.8 billion.
The Sh700 million balance on the Sh2.5 billion, will be injected to grow the bank's capital base to strengthen its lending power.
second largest bank
StanChart is Kenya's second largest bank by profitability, and its core business has been in financing corporates transacting in and across the three regional markets.
According to the management, the bank’s presence in Asia as securities services providers are already strong and is now seeking entries in the Middle East and South Asia region while the current buyout has sorted out the Africa region.
The buyout gives StanChart a foothold in 16 African markets with a direct presence in Botswana, Ghana, Kenya, Mauritius, Tanzania, Uganda, Zambia and Zimbabwe and indirect capabilities in eight markets that include Egypt, Cote d'Ivoire, Malawi, Morocco, Namibia, Nigeria, Tunisia and South Africa.
