KCB today announced the results of its Rights Issue that concluded recently, raising the KShs2.45 billion in capital the bank required for growth with KShs310 million set to be returned as a refund to applicants following shortage of untaken rights for allotment. Chairman Susan Mudhune told the media at a briefing this morning that shareholders who applied for their rights received full allotment. Following is the Chairman's full statement:
" On behalf of the Board of Directors of KCB Group, I am pleased to present to you the results of the just concluded KCB Rights Issue.
"I am indeed excited to announce that the KCB Rights Issue attracted excellent response from shareholders and was, consequently, over-subscribed. As you may recall, 50 million rights were offered to shareholders to purchase shares at a discounted price of KShs49. We expected to raise KShs2.45 billion on full subscription. However, we received 33,103 applications from shareholders for the allotment of their rights, worth KShs1.96 billion. A further 9,015 applications were received for additional rights worth KShs.800 million making the value of all applications to be KShs2.75 billion. This is KShs300 million more than the amount of capital we anticipated to raise.
"The tremendous response from shareholders forced us to appeal to the Capital Markets Authority for more time to process the applications. We are pleased to confirm that all shareholders who applied for their rights received their full allotment. Rights worth KShs490 million which lapsed were considered untaken and allotted as additional rights to applicants.
"The Board approved the following criteria for the allotment of additional rights which has been endorsed by the CMA:
- All applications for under 10,000 shares were allotted in full.
- Applications for shares above 10,000 were allotted on a pro-rata basis.
"The rationale for these criteria was to enable small shareholders to increase their holding in the company, which was one of the objectives of the capital-raising exercise, while also maintaining the broad base of our register. This would also enable us to quickly process the required refunds to applicants who have paid excess funds.
"Accordingly, additional rights were allotted as follows:
- 8897 applicants received up to 10,000 additional shares worth a total of KShs230 million.
- 118 applicants received over 10,000 additional shares worth a total of KShs260 million.
- A refund of KShs310 million would be made to applicants for lack of sufficient untaken rights to cover the demand.
"Following the conclusion of this exercise, the Government’s shareholding in the bank has reduced from 35% to 26.2%. After the Government, the second largest shareholder has approximately 5%. And the top ten shareholders have around 24% in total.
"As per the remaining part of the timetable of principal activities of the KCB Rights Issue, new share certificates shall be dispatched to shareholders by September 22, 2004 paving way for the commencement of trading of the new shares at the Nairobi Stock Exchange on September 27 2004.
"Following the success of this initiative KCB is now fully compliant in all the key prudential ratios. We are also now able to grow the business going forward after raising our capital and would accommodate additional assets by KShs20 billion and liabilities by KShs30 billion.
"I would like to thank our shareholders for their continued confidence in the business as evidenced by this significant over-subscription. As we look forward to the future the Board and Management are committed to ensuring that shareholders earn a decent return on their investment.
"Let me also commend the KCB team which has put a substantial amount of work into this exercise and whose efforts have contributed immensely to the success of the Rights Issue. Our financial advisor and lead stockbroker Suntra Stocks now Suntra Investment Bank, co-sponsoring stockbrokers Dyer
and Blair Investment Bank, Standard Stocks and Kestrel Capital, our legal advisor, Oraro and Company Advocates, our Auditors Ernst and Young, our brand and publicity advisors, Ogilvy and Mather have done a great job guiding us through this process. I would also like to thank all other parties
involved for their invaluable contribution.