Bankers boost shareholders' confidence in TPSEA Rights Issue

By James Anyanzwa

CfC Stanbic Bank Limited and Diamond Trust Bank Kenya Limited will guarantee TPS Eastern Africa’s rights issue priced at Sh48 per share.

In a statement TPSEA said the two banks will underwrite up to 30 per cent of the Issue, indicating a high level of confidence in TPSEA.

"Information from our transaction advisors is that the share price of Sh48 has been well received by the shareholders and the public and the underwriting will further boost the level of comfort", said Mahmud Janmohamed, Group Managing Director of the hotel group.

The Capital Markets Authority (CMA) and Nairobi Stock Exchange (NSE) approved the issue last week, paving the way for shareholders to take up their rights at a discounted price of Sh48 per share.

TPSEA is seeking to raise Sh1.2 billion in fresh funds to finance its ambitious expansion plans and refurbish key properties in the region.

The firm is planning to issue 24,701,774 new shares, at a rate of one (1) share for every five (5) held.

The company’s register of members was closed Wednesday at 5.00pm for the purpose of determining the rights entitlement for each shareholder of the company.

Funds raised from the Rights Issue will also be complemented by long-term borrowing and other sources of funds that the Board may deem appropriate to help finance the expansion across the region as required.

The proceeds of the Rights Issue will be used mainly for recapitalisation of Jaja Limited, to undertake development of three properties in Nanyuki, Nakuru and Elementaita, and a 51 per cent acquisition of assets in Tanzania and Rwanda.