Helios EB Investors sold 2.44 per cent of shares to the Uganda pension fund at Ksh4.5 billion, cutting its stake in the bank to 9.78 per cent.
The deal puts NSSF Uganda on the list of top 10 shareholders of the bank and could see it push for representation on the board.
NSSF Uganda was holding a stake estimated to be worth Sh100 million (Ush3.1 billion) as at the end of last year.
Uganda's National Social Security Fund (NSSF) has bought a stake at Equity Bank from London-based Helios EB Investors, dislodging the investment fund's position as the single largest shareholder of the Kenyan lender.
Helios sold 2.44 per cent of its ownership to the pension fund at Ksh4.5 billion ($45.7 million), cutting its stake in the bank to 9.78 per cent which is lower than the 12.22 per cent held by Norway-based Norfund.
“NSSF Uganda has acquired from Helios a 2.44 per cent stake in Equity Group at a price of Ksh50 ($0.51) per share,” said the Capital Market Authority in a statement.
The unit price paid by Uganda’s pension fund is higher than the current market price of Ksh46 ($0.47) a share.
“Our fair value of the share is Ksh47 ($0.48) so the higher price is just a premium NSSF had to give Helios to get into the shareholder books,” said Mercyline Gatebi, a research analyst at Genghis Capital.
She pointed out that investors factored in news coming from the bank in current market price. The deal puts NSSF Uganda on the list of top 10 shareholders of the bank and could see it push for representation on the board. NSSF Uganda was holding a stake estimated to be worth Ksh100 million (Ush3.1 billion) as at the end of last year.
Helios has been the largest shareholder of the bank since 2007 when it acquired a 24.45 per cent stake at more than Ksh11 billion ($111.7 million).
At the close of last year it sold half its ownership, 12.22 per cent, to a company owned by two private funds; Norfund and NorFinance, at a price Burbidge Capital put at Ksh23 billion ($233.6 million). If confirmed, it would mean the firm has so far made Ksh16.5 billion ($167.6 million) from its initial investment.
Norfund has already occupied a seat at the board of the group at the expense of Helios, which now has three directors down from four.
Deepak Malik represents the interests of Norfund at the board after Alykhan Nathoo of Helios exited.
When it made the investment, Helios had stated that it planned to hold Equity Bank shares for seven years but extended the period owing to high returns from the lender both in capital gains and dividend payouts.
Helios invested Ksh9.5 billion ($96.5 million) in Africa Oil Corporation for a 12.4 per cent stake in May, around the time it sold some of its Equity Bank shares.
The transaction comes after the Treasury exempted share transactions from capital gains tax.
Equity Bank is currently in an ambitious expansion drive, estimated to cost over Ksh200 billion ($2 billion), with plans to enter 10 new markets in a decade.
The bank plans to raise Ksh140 billion ($1.4 billion) from shareholders through rights issues or from a secondary public offering.
Shareholders who do not participate in capital activities are likely to be diluted.
Expanding reach
Last month the bank entered the Democratic Republic of Congo through the acquisition of a majority stake in Pro Credit Bank thereby expanding its reach to six countries including Kenya, Uganda, Tanzania, Rwanda and South Sudan.
The bank plans to enter Ethiopia, Burundi, Mozambique, Malawi, Zambia and Zimbabwe in the next five years before setting base in Nigeria, Ghana and Cameroon in West Africa.
Equity, which also operates a brokerage and insurance arm, is entering the telecommunications sphere through a mobile virtual network operator licence riding on Airtel’s infrastructure.
The venture is expected to be cash intensive with the lender having disposed its stake in Housing Finance for Ksh2.7 billion ($27 million) to build its buffer.
NSSF Uganda holds assets in excess of Sh152 billion ($1.6 billion) part of which, estimated at six per cent, is invested in Kenya mainly the Nairobi Securities Exchange.
Equity Bank shares are also listed on the Ugandan and Rwandan bourses where it has subsidiaries.
