Kenya’s Housing Finance raises Sh3.5b in rights issue, targets expansion

NAIROBI: Housing Finance has raised Sh3.5 billion in a successful cash call which is part of the mortgage financier’s bid to raise funds for an ambitious expansion drive.

Housing Finance had priced the cash call at Sh30 per share, offering shareholders a total of 116.6 million new shares and one share for every two ordinary shares held.

The rights issue, however, surpassed expectations with shareholders posting up to Sh9 billion worth of applications, more than twice the value of the original cash call.

As a result, the company has stated that all shareholders will receive 100 per cent allocation on their initial allotment and 70 per cent on any additional application for additional shares.

“Housing Finance has an expansive business plan and the cash received from the rights issue will enable the firm to execute its ambitious five-year strategic plan,” stated Managing Director Frank Ireri.

Housing Finance further revealed that large shareholders like Equity Bank, British American Investments Ltd and National Social Security Fund (NSSF) applied for their rights in full.

LOAN BOOK

Recent financial reports from the mortgage lender indicated the company registered a profit growth of 6 per cent to record Sh719.78 million up from Sh676.17 million in a similar period in 2013.

The firm saw its loan book grow by 29 per cent to Sh43.27 billion, up from Sh33.47 billion recorded in 2013 on the back of stable base lending rates.

Customer deposits increased to Sh33.14 billion up from Sh25.92 billion in 2013 with interest income from loans and advances growing by 13 per cent to Sh4.14 billion, up from Sh3.66 billion during a similar period in 2013.

The firm is eyeing at least seven new branches this year including Kitengela, Westlands and Naivasha.