Three investors court troubled Imperial bank ahead of CBK decision

Imperial Bank Limited. (Photo: Courtesy)

The Central Bank of Kenya has announced that three investors have expressed interest in pumping money into troubled Imperial Bank.

In a joint statement with receiver manager the Kenya Deposit Insurance Corporation (KDIC), CBK said that the three investors will now be allowed to formally submit their proposals by mid-January next year.

“The shortlisted investors were determined using appropriate and objective criteria based on, inter alia, regulatory imperatives and prudential guidelines which will ensure a speedy and optimal recovery for depositors, creditors and other stakeholders of IBLR,” said CBK.

Even though the regulator did not disclose the names of the investors, it said that all the three and other respondents have been informed of the outcome of this process. According to its schedule for recovery of the bank, this was done this week and the investors are expected to sign the confidentiality undertaking by end of next week.

From December 11, CBK expects crucial activities such as due diligence, management presentations, site visits and credit file reviews to be carried out. “Shortlisted investors will be granted access to a comprehensive confidential data room that will allow them to develop a formal proposal for IBLR, after completion of appropriate confidentiality agreements,” said CBK.

Form mid January, investors will be required to submit non-binding offers which CBK expects to evaluate and pick final investor by February 2. In mid April, CBK and KDIC will carry out negotiations with final investor(s) and stakeholders before signing legal documents.

Forensic audit

By June 29, CBK expects to have completed the transaction ahead of the end of the receivership period in July. Yesterday marked exactly two years under receivership since a caretaker manager took charge on October 13, 2015.

Last month, depositors had threatened CBK with a lawsuit, accusing it of lapses during supervision. The forensic audit on the bank had revealed in October 2015 that the bank suffered fraudulent activities of substantial magnitude and misrepresentation of financial statements.