The Capital Markets Authority (CMA) yesterday approved a Rights Issue for CfC Stanbic Holdings. A statement from CMA says that the Rights Issue was approved in accordance with the requirements of Regulation 11 of the Fourth Schedule to the Capital Markets Regulations, 2002.

The approval will allow the company to issue and list an additional 121,637,427 ordinary shares of par value of KES 5 each by way of renounceable rights at a rights issue price of KES 33 each to shareholders of ordinary shares of CfC Stanbic Holdings on the register of its members at the close of business on August 29, 2012 on the basis of 4 new share for every 9 shares held.

 A rights issue is an offer given by a company to existing shareholders to buy a proportional number of additional shares at a given price, within a fixed period. Rights are often transferable and a shareholder may sell them on the open market.

 'CMA has reviewed the disclosures by CfC Stanbic Holdings and is satisfied that all the requirements have been met in accordance with the Fourth schedule of Capital Markets (Securities) (Public Offers, Listings and Disclosures) 2012. CMA acting Chief Executive, Paul Muthaura said while announcing the approval.

CfC Stanbic Holdings  says the Rights Issue would strengthen the Group's capital position, and support the continued growth of the business in the future.

"In the past few years we have laid a strong foundation for the Group's future and as the impressive results as at September 30th demonstrate, we have been successful in implementing our strategy, " said Kitili Mbathi CFC Stanbic Managing Director at the AGM in December "We believe that there are great opportunities for growth and it is critical that we have sufficient capital to take advantage of these opportunities."

CFC Stanbic Holdings has released a public notice on disclosure of the terms of the rights issue as approved by the Capital Markets Authority. Pesatalk will have the disclosure soon.