[2008-05-05]  Housing Finance rights issue on
The Capital Markets Authority has approved Housing Finance’s proposal to raise more capital through a rights issue.

Through it, the mortgage financier will issue 115,000,000 new ordinary shares as rights to existing shareholders through the Nairobi Stock Exchange.

Transaction advisors have, consequently, sent a notice to the NSE which set May 12 as the date for the closure of the issue.

CMA’s approval gives impetus to the mortgage financier’s quest to strengthen its capital base in order to boost its lending capacity.

Speaking after the approval by CMA, Housing Finance’s managing director, Mr Frank Ireri, expressed optimism that the issue will be successful.

“Our five-year strategic plan has the requisite planks to transform Housing Finance into Kenya’s premier enabler for the property industry offering solutions on all types of property funding and development across the value chain,” Mr Ireri said.

“Strengthening our capital base is prudent and key to the vision of expanding our offering to consumers in a rapidly developing property sector”.

Housing Finance had last year announced First Africa Capital as the lead transaction advisor. CFC Stock Brokers and Standard Investment Bank were named the joint lead stockbrokers, while Housing Finance will be the receiving bank. KPMG is the reporting accounting firm while Hamilton Harris & Mathews are the legal advisors. Comprite Kenya limited will manage the share register.

Although transaction the advisors have not released the model of the issue, it is expected that only registered shareholders as at the record date will be able to participate in the issue.

Biggest IPO

The timing of the issue hot on the heels of Kenya’s biggest IPO - Safaricom - is such that it will enable the mortgage financier’s issue to make a financial killing from the expected investor refunds.

Additionally, shareholders and investors will be keen to snap up rights of the well established property financier given that the economy could improve and translate to better resource allocation to the property sector.

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