The Capital Markets Authority has approved NIC Bank’s KES 2.07 billion Rights issue. The bank will issue 98,724,391 rights to purchase New Ordinary Shares at an Offer Price of KES 21 per share, a 43% discount from the latest price of NIC Bank on the NSE as of 18th July 2012.  The rights will be issued at a rate of one share for every 4 shares owned.

In a press release, NIC Bank Group Managing Director, James Macharia, said “This is a significant milestone for us as we prepare to take NIC Bank to the next growth level. This key development allows our shareholders to inject additional capital in order to be part of this growth.”

The funds raised through the Rights Issue will give NIC Bank the required financial strength necessary to pursue both its local and regional expansion activities including its recent entry into Uganda. NIC Bank Group is now present in Uganda (NC Bank Uganda) and Tanzania (NIC Bank Tanzania).

Shareholders in the register as at 30th July 2012 will be entitled to participate in the Rights Issue. Trading of rights on the NSE will begin on 27th August 2012 and end on 07th September 2012.

NIC Bank has recorded significant growth over the last 5 years. The bank’s pre-tax profit has increased by an annual average growth rate of 36 percent, from KES 1.1 billion in 2007 to KES 3.6 billion reported in 2011. NIC Bank’s balance sheet has also grown considerably as well, with total assets of KShs 79 billion as at December 31 2011.

The holders of the New Shares will be entitled to receive additional bonus shares in the ratio of 1 bonus share to every 10 New Shares after the rights issue. This means that for every 10 new shares applied for and allotted, Shareholders will be entitled to receive 1 additional bonus share subject to the CMA’s approval of the proposed Bonus Issue.

The Rights Issue will close on 14th September 2012.