The NIC Bank Rights Issue which is Kenya’s third such issue this year begins today with the first trading day of NIC Bank Rights at the Nairobi Securities Exchange. The rights will trade for the next two weeks.
Each eligible NIC shareholder has the right to buy 1 new NIC share for every 4 already held and will until 7th September have the option to freely trade their rights at the NSE at a price set by the market. After 7th September, holders of NIC rights will be eligible to buy a portion of the 98,724,391 new NIC Bank shares at a discount price of KES 21 compared to the 30 shilling range that they are currently trading at.
Final NIC shareholders after the rights issue will also be entitled to 1 extra share for every 10 they will hold in a proposed bonus issue subject to regulatory approval. The NIC Rights Issue has a minimum subscription of 50 percent, meaning that at least 49,362,196 shares must be bought for the rights issue to be carried out fully.
With the targeted 2.07 billion shillings to be raised from purchase of the new shares due to fully list in October, NIC Bank will further its local and regional expansion into Uganda where it has already established a subsidiary. Over the past five years, NIC has been one of the country’s fastest growing banks with year-on-year profit climbing an average of 36 percent to 3.6 billion last year.
In 2007, NIC raised 1.15 billion shillings in a rights issue that saw it expand to have 24 branches in Kenya, Uganda and Tanzania to date.
Pesatalk will keep you up to date with the NIC Rights Issue as it progresses.