The new shares of British-American Investments Company (Kenya) Limited has been opened for purchase by the public following the approval by the Capital Markets Authority (CMA) of a request by the company to raise Ksh5.85 Billion from the capital market through an Initial Public Offering (IPO) of its shares.
The offer which was officially launch by the Prime Minister Raila Odinga will see the company float 650,000,000 new ordinary shares at an offer of Ksh9 (nine) per share.
Launching the offer the Prime Minister said the IPO process was a clear demonstration of confidence in Kenya’s economic outlook, “which sends a very positive signal to the international investors.”
“The coming into effect of the new constitution has renewed the country’s hope of achieving middle income status as outlined under Vision Twenty Thirty. I would like to take this opportunity to assure investors that Kenya is on a renewal path both constitutionally and economically. I would therefore like to urge the Capital Markets Authority and the Insurance Regulatory Authority to go the extra mile to provide a thriving climate for new investors that fully benefits Kenyans. I would also like to urge investors like British-American to invest in a manner that will have the greatest positive impact on Kenyans lives. Collaboration between government and investors holds the key to more rapid development of the financial sector and the economy at large,” said Mr. Odinga.
The Prime Minister added that the introduction of bancassurance, microinsurance, agricultural, livestock insurance and investment products are timely extensions of risk transfer and investment tools that have the potential for greatly reducing the exposure to risks affecting the economic well-being of Kenyans.
“All these are indicators that our economy is approaching a critical threshold and may soon be entering a period of sustained growth. As we enter the next phase of growth, a stronger financial and insurance sector will be critical,” Mr. Odinga said.
British American Investment Company Chairman Nicholas Ashford- Hodges said the fund raised from the IPO would be used to boost the company’s Kenya’s and regional operations.
“This IPO gives us an opportunity to increase the scope of its operations and widen our footprint. Having recently opened operations in Uganda, our strategic intent is to spread our wings even further to the rest of Eastern Africa and the next step will be to open offices in Tanzania, Rwanda and Southern Sudan. We are in the process of a seeking the necessary approvals,” said Mr Ashford- Hodges.
The British American Investment Company Limited Group Managing Director Benson Wairegi said that in addition to regional expansion, the company is also keen to take advantage of emerging opportunities through innovative products and distribution channels such as microinsurance and bancassurance.
“We seek to fundamentally redefine the scale and scope of the insurance sector in Kenya and the wider region. We will tap the economic potential nascent in the newly created counties by building on our core distribution strengths, in particular our sales force presently one thousand strong and intended to be expanded considerably further. Our established model of scale, reach and multi-layered selling will also be extended to the retail market and SMEs in the wider geographical region,” said Wairegi.
Mr. Wairegi continued: “We believe the offer price of Ksh9 is affordable and will appeal to many investors. Whilst the Group is already over 60% owned by Kenyan investors, this IPO will reinforce its position as a truly Kenyan financial institution. I therefore invite you to join us as a shareholder of this great company.”
The offer will be opened to the east African retail investors for whom 30% of the shares have been allocated. Foreign investors have also been allocated 30% of the shares with 37% reserved for institutional investors. The remaining 3% has been reserved for Employee, Agents and Individual Life Policy Holders.
The offer closes on August 5th, 2011.
(Press Statement as received from British American