By John Oyuke
Jamii Bora Bank has launched a rights issue to raise Sh520 million to boost its core capital and fund expansion.
The rights issue to trade through private placement will see the bank issue 3.7 million new ordinary shares at Sh140 each, at the ratio of two new ordinary shares for every five ordinary shares held.
Standard Investment Bank Limited is the appointed Lead Transaction Adviser to the bank’s cash call.
Jamii Bora Bank Chairman James Gacheru said the rights issue will increase the capital base and grow, in the process increasing shareholder value and reaching a wider market.
“The additional capital raised from the rights issue will be used to fund asset growth, investment in the branch network and alternative channels in Kenya,” he said in a statement yesterday.
The issue was approved during the Annual General Meeting of the financial institution in June, this year. Gacheru said the bank will require Sh300 million in the next four years and an additional Sh200 million core capital to meet the Sh1 billion requirements set out by the Central Bank of Kenya.
The right issue closes on November 9, 2012. A minimum rate of 44 per cent has been set for the issue to be declared successful.
This implies that a minimum of 1,635,714 new shares, amounting to Sh229 million, need to be taken up and fully paid for in the rights issue. Asterisk Holdings Ltd and Jamii Bora Scandinavia AB with total shareholding of 48.7 per cent in the bank have indicated that they intend to take up their full Rights.
There are 582 shareholders in total. Since the injection of fresh capital late last year, Jamii Bora Bank’s fortunes have continued to turn around.
“Our journey to profitability continues in earnest. We managed to record a profit before tax of Sh18 million as at June this year from a loss position of Sh37 million the previous year,” said Gacheru.