Kigali — The government will sell 25 percent of its shares in Bank of Kigali (BK) through an Initial Public Offering (IPO) mid next year as the country steps-up efforts to support the growth of its nascent stock exchange, Finance Minister John Rwangombwa said yesterday.
The move will make BK the second local company to be privatised through an IPO after government successfully sold, to the public, 25 of 30 percent of the shares it owned in Bralirwa, the country's largest brewery.
The Minister told The New Times that the government is yet to ascertain how much it will raise from the IPO until next year after it has assessed and reviewed investor appetite for the bank's shares.
Rwangombwa said that plans to sell 99 percent of government's holding in Rwanda's largest bank to a strategic investor in 2008 were unsuccessful after the prospective buyer, Barclays Bank, failed to match government's valuation.
"We didn't agree with what Barclays Bank was offering, so we decided to put BK on the stock exchange market," he said.
Government is the largest shareholder in BK with 66.33 percent stake followed by Social Security Fund of Rwanda (SSFR) with 33.66 percent. Other shareholders include Prime Holdings, Ocir-Café, Ocir-Thé, the National Post Office and RAMA.
The bank registered a profit after tax of Rwf4.1 billion for the first nine months of 2010, accounting for 53 percent of the total profits of the overall banking sector while deposits grew by 15 percent from Rwf125 billion in December last year to Rwf143 billion. It opened 12 more branches this year.
The government also plans to float 20 percent of its shares in insurer Sonarwa and 10 percent in MTN Rwanda.