UAP Holdings Limited has made a Public Offer for the subscription of new ordinary shares in a bid to raise KES 750 million in equity capital. The company has offered a subscription for 12.5 million ordinary shares with a nominal value of KES 5 each at a subscription price of KES 60 per share.
The offer is open to 4 categories of investors, including UAP Group employees (5% of the shares), East African Retail Investors (55% of the shares), East African Institutional Investors (35%) and Foreign Institutional Investors (5%).
“The Board of Directors believes that this Public Offer represents a unique opportunity for investors to acquire shares in a well established business with a demonstrated track record of profitable operations and intrinsic growth prospects,” said UAP Chairman Dr Joseph Wanjui.
The KES 750 million is part of a larger KES 5.4 billion that UAP intends to use to fund its regional expansion plans and strengthen the balance sheet of its existing businesses as it seeks to take advantage of investment opportunities in selected African markets.
Despite their confidence and optimism, UAP’s Offer, which closes on the 5th of December, will not involve a listing on the NSE. However, Group Managing Director, James Muguiyi noted that the firm intends to list within a time-frame of 12 to 18 months. Speaking during the official announcement ceremony on Wednesday morning in Nairobi, he said that the Offer would give Kenyans and East African citizens a chance to own a part of the company and share in the future growth of the business.
This follows what the Group has termed as the successful completion of a private equity fund raising initiative that was part of their growth strategy. The initiative helped UAP to raise KES 4.7 billion by June 2012 with help from three international private equity investors. The investors were the Aureos Africa Fund L.L.C, AfricInvest Fund II L.L.C, AfricInvest Financial Sector Fund, and Swedfund International AB.
“We believe that these firms will bring new international shareholders on board who will enhance the profile of UAP Group and supplement the excellent local business experience and market knowledge that UAP Group’s current shareholders have,” said Dr Joseph Wanjui during the Group’s official announcement ceremony.
Speaking during a signing ceremony in Nairobi, Dr Wanjui said that the new capital injection would support the Group’s regional and pan-African expansion strategy.
He mentioned that the Public Offer would give investors a chance to bank on emerging markets that promise greater growth opportunities than those available in more developed markets. As such, UAP intends to set up more operations in Tanzania and the Democratic Republic of Congo (DRC) by the end of this year. The firm already has a presence in Uganda and South Sudan. This comes shortly after the Group officially announced that it had set up insurance operations in Rwanda.