10 September 2008
Nairobi — Co-operative Bank Wednesday presented its listing application to the Capital Markets Authority as a first step in seeking approval for its forthcoming initial public offering.
The bank is hoping to commence the sale of its shares to the public by early November, if CMA approves its application.
It will be seeking to raise at least Sh10 billion from the market to fund branch expansion, upgrade its infrastructure and diversify into mortgage financing.
Speaking during a courtesy call to CMA chief executive Stella Kilonzo, the bank's managing director Gideon Muriuki said the IPO will seek to allow ordinary Kenyans share in the vision and the success of the bank.
"We invite all Kenyans to plan and invest in Co-operative Bank to share in the success story," said Mr Muriuki.
The approval process saw the bank change its shareholding structure to conform to Capital Market requirements that institutions seeking to list at the stock market must be companies limited by shares. In its early status Co-op Bank relied on the co-operative movement philosophy which gives much weight on individual holding- one man one vote, rather then one share one vote.
Initially, the bank had hoped to do a dual listing of its share under class A shares would be the cooperative societies (with voting rights) and individual members would make up class B shares (without voting rights).
However, hit by legal hurdles it formed Co-opholding Co-operative Society Limited, to hold 3,805 societies shares- what would have constituted class A shares. The shareholding translates to a 77 per cent stake of the bank.
To meet the minimum listing threshold of at least 25 per cent, Co-opholding will dilute it's holding by 15 per cent.
In preparation, the bank has hired 150 staff to work at its process centre.
The bank will be the receiving bank as well as registrar- keeping records of the applicants and details of those who succeed.
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