Africa focused investment firm Helios is cutting its stake in Equity Bank by half. The private equity fund, the single biggest shareholder of Equity Bank controlling about a quarter of the lender’s shares is selling half its stake in Equity Bank, or 12.22 per cent of the bank’s shares to Norway’s Norfininvest AS.
The transaction, which requires regulatory approvals, will involve the sale of 452.9 million shares at an undisclosed price. Norfininvest is jointly owned by Norfund, the Norwegian Investment Fund for developing countries, and Norfinance AS.
Kjell Roland, managing director of Norfund said the investment is in line with the fund’s strategy to support banks targeting entry level and mass-market retail banking, and SMEs.
“This strengthens our financial institutions investment portfolio in Africa,” said Roland. “Equity is an attractive business with an established track record within the banking industry. We look forward to working with all stakeholders to grow the business further in particular as the bank embarks on its new phase of strategic development.”
Babatunde Soyoye, managing partner of Helios, said: “Helios is delighted to introduce Norfund and NorFinance as new, like-minded investors. Norfund and NorFinance share Equity’s core values of partnership, promoting financial inclusion and strong corporate governance.”
“We are proud to have played a role in the bank’s growth and success to date, and look forward to continuing to partner with Equity in the next phase of its development and to support its direct positive impact on the lives of people in the communities within which it operates.” Helios bought a 24.45 per cent stake in Equity in 2007 for more than Sh11 billion.
Strong partners
James Mwangi, Group CEO Equity Group Holding said this transaction, which is currently the largest of its kind in Sub Saharan Africa, brings diversification to Equity’s capital base which is important for the Group.
“Equity has always aimed to be an innovative and inclusive provider of financial solutions. We are excited by the expanded opportunities this development presents, to combine our market leading position with two strong international partners who bring along their substantial resources as well as expertise, which we believe will be invaluable in accelerating the growth of our business,” Mwangi said.
Equity is the largest bank in customer numbers at around 10 million accounts and approximately Sh360 billion ($4 billion) in assets. The lender, which is listed on the Nairobi Securities Exchange and the Uganda Securities Exchange, has subsidiaries across the region.
Last year, Helios acquired a $40 million stake in Wananchi Group, the owners of pay-TV provider Zuku. It is also a significant shareholder in oil marketer Vivo Energy, which trades in Kenya as Shell.
Helios’ transaction advisers were Goldman Sachs International and Anjarwalla and Khanna. Norfund was advised by Norton Rose Fulbright LLP, KPMG and McKinsey & Company.
