[2008-08-08]  KCB rights issue oversubscribed by 46 pc
Kenya Commercial Bank registered a 46.5 per cent over-subscription in its recently concluded multi-billion shilling rights issue.

KCB chairman Peter Muthoka. The Sh5.5 billion additional capital generated through the second issue will boost the bank’s capacity to grow its balance sheet. PHOTO: Martin mukangu
The country’s largest bank by branch network raised Sh8.1 billion against a target of Sh5.5 billion. The Government, which opted not to participate in the exercise, sold its rights at the Nairobi Stock Exchange (NSE), diluting its shareholding in the bank to 23.1 per cent from 26.2 per cent.

"The success of the second KCB rights issue reflects the confidence shareholders and other investors have in the bank’s future," said Mr Peter Muthoka, the bank’s chairman at a press briefing in Nairobi yesterday. Muthoka said shares will start trading at the NSE on August 25.

The first KCB rights issue raised Sh2.35 billion, four years ago. The money was used to fund a project meant to repair its then dented public image.

Muthoka said the Sh5.5 billion additional capital generated through the second issue, the largest ever undertaken in Kenyan history, will boost the bank’s capacity to grow its balance sheet, enhance its prudential ratios, invest in subsidiaries and expand its network in Kenya and across the region.

The rights issue was launched on June 23 to raise more than Sh5.5 billion. 222 million new shares were offered to the shareholders in the ratio of 1:9.The offer closed on July 18.

Muthoka said all refunds, both by electronic transfers and bankers’ cheques shall be effected by August 15.

He said certificates for new shares should be dispatched to shareholders on August 15, when shares will be credited to CDS accounts.
Source: (C) 2008 STANDARD GROUP