Joseph Bonyo
15 July 2008
Nairobi — Realignment of the share holding structure of mortgage financier Housing Finance is inevitable following the successful subscription of its rights issue. Anchor shareholders are likely to have increased their stake in the company by acquiring additional shares.
Selling at a discounted price of Sh20 per issue, the offer was oversubscribed by three per cent. Listed at the bourse on Friday, last week, the 115 million shares raised Sh2.3 billion that the financier needed of to foot its expansion bill.
However details of the exact positioning of the shareholders in the new structure firm were still sketchy.
Managing director Mr Frank Ireri acknowledged that the rights issue whose allotment results would be released in the course of this week would definitely create new levels in the strength of ownership.
"Our anchor shareholders participated in the issues, but also went ahead and acquired additional shares in the company and this will definitely increase their participation in the company" said Mr Ireri, moments after the listing ceremony.
A source close to the transactional advisors also pointed out that the new acquisition from the anchor shareholders was substantial during the issue. Crediting of the new shares to CDSC accounts was effected on Thursday, a day before the start of trading for the additional shares.
Equity Bank and British American Investments Company (Britak), last year bought out approximately 25 per cent stake in the firm. The Commonwealth Development Corporation , an agency of the British government and a founder of the firm held the shares.
Previously known as Housing Finance Company of Kenya or HFCK, the institution was listed in 1992."With this additional capital we are able to increase on our deposit taking to about 25 billion, while our lending will also go up by about four fold," explained Mr Ireri. The slow growth in the firm's deposit is attributed to stiff competition for deposits in the banking industry.
Lending business for the institution had also come under threat as other financial institutions compete for its market share. With a leveraged balance sheet, Housing Finance can now roll out plans contained in its five-year strategic plan.
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