Nairobi — Equity Bank and British American Investments Company Limited (BAICL) want certain exemptions from the regulators in their quest to buy 24.9 per cent stake in Housing Finance.
The two were seeking exemption from the Banking Act requirement that barred transfer of more than five per cent share capital of an institution without Central Bank of Kenya's approval, Housing Finance managing director Frank Ireri said yesterday.
Further, they sought exemption under the "Take Over and Mergers" regulations to ensure the mortgage firm continued trading at the Nairobi Stock Exchange (NSE) even as the deal is consummated.
"The two institutions want certain exemptions from the regulators in their application for approval of the transaction," Mr Ireri told the Press in his office.
Without the first waiver, Equity Bank and BAICL will have to buy them from the NSE as any other investor.
The 24.9 per cent shares is currently held by the Commonwealth Development Corporation
Failure to obtain the second exemption will see the HF shares suspended from trading at the stock market until the deal goes through.
Mr Ireri said the two new strategic investors would promote HF leadership in the country's mortgage market as their strengths will fit into its five-year strategic plan.
The plan, which is anchored on supply of property, innovative products, volume business and long-term funding, was launched in June 2006.
"Combining HF's product competencies in financing product development and purchase with Equity Bank's unique emotional bond with 1.4 million customers will form a formidable partnership," said Mr Ireri.
If the Government and NSE will not exercise their rights option in the company's proposed issue, the shares will be traded on the floor rather than sold to specific shareholders.
Under the deal, Equity Bank will acquire 20 per cent of the HF shares while BAICL will take 4.9 per cent.
The two are awaiting approval by Central Bank, stock market and the Capital Markets Authority for the deal, estimated at Sh1.1 billion, about a quarter of HF's Sh4.3 billion capital base.