KCB rights issue undersubscribed

Kenya Commercial Bank (KCB)’s rights issue that was issued last month to share holders has registered under subscription of up to 13 percent. This means that KCB raised Ksh12.5 billion out of the targeted Ksh15 billion through the rights issue which opened on July 1, 2010 and closed on July 23, 2010. According to the statement from KCB announcing the rights issue results, a total of 732,391,366 shares were taken up against 887,111,110 shares offered in this rights issue with a total value of Sh12, 450,653,222 of which will be credited to the bank’s capital account after expenses are removed. Rights issue is when the existing shareholders in company are given an opportunity to buy extra shares at a discount. The under subscription represents 82.56 per cent subscription, which means that subscribers will get full allotment of the shares they applied for. The total number of KCB ordinary shares increased to 2,950,169,366 ordinary shares of Sh1 each up from 2,217,777,777. The balance of 154,719,744 rights form part of the bank’s authorised capital for future issuance. The authorised capital for the bank is 3.5 billion shares. According to the press statement, the Chairman of the board of Director, Peter Muthoka, said that the level of subscription had the lower cap at 50 per cent or Sh7.5 billion which they had achieved. “We are very excited that we have been able to attract approximately Sh12.5 billion which surpasses the minimum level of success sanctioned by the Capital Markets Authority by 166 per cent.” he said. He said although the bank had missed target by about Sh2.5 billion, the new capital position gives the bank sufficient cover to continue to increase business within the anticipated growth levels without infringing on the Central Bank of Kenya’s prudential ratios. Mr. Muthoka said incremental capital growth through retention of earnings in coming years would further cushion the business against possible negative impact as a result of the deficit which would have occurred at the tail-end of the bank’s five-year plan. “This success sets the stage for KCB to continue its growth momentum into the future through increased assets and liabilities. The Sh12 billion additional capitals bring our total capital to Sh35.4 billion,” he said. This new capital position, he said, had improved the bank’s prudential ratios by a minimum of 10 per cent giving the KCB Group the capacity to grow assets by over Sh100 billion. Ends

News

KCB rights issue undersubscribed