22 December 2012

Kenya: UAP Public Offer Oversubscribed By 130 Percent

UAP Holdings Limited public offering of shares has been oversubscribed resulting in a 130 percent subscription level.

This follows the robust demands from retail and institutional investors as well as the company's employees, policy holders and agents.

The company, which had floated 12.5 million shares at an offer price of Sh60 per share received applications for 16,198,500 shares, raising Sh971 million against a target of Sh750 million.

The offer received full bids of the portion reserved for each category of investors defying the odds of end year festivities and an overcrowded market.

"We went to the market at a challenging time; a time when several other players were also looking for funds coupled by challenges posed by electioneering," said James Muguiyi UAP Group Managing Director.

"This oversubscription of our offer of shares to the public clearly shows the confidence investors have in the medium to long term growth prospects of the company," he added.

Muguiyi said the Group would not be seeking to List the new shares at the Nairobi Securities Exchange adding; "the new shares will be traded Over-the-Counter and we expect this to provide a sufficient level of liquidity prior to the listing."

The new shares will commence trading Over-the-Counter on January 9, 2013 and the listing at the NSE is expected to be effected within a period of 12 to 18 months.

The successful conclusion of the Public Offer now brings the total sum of new capital raised by UAP Group this year to Sh5.4 billion. The Group had earlier raised Sh4.7 billion from three international private equity investors: Aureos Africa Fund L.L.C, AfricInvest Fund II L.L.C and AfricInvest Financial Sector Fund, as well as Swedfund International AB.

The new capital injection is expected to support the Group's regional and pan-African expansion strategy.

It is also expected to strengthen the balance sheet of its existing businesses and invest equity to support the execution of its real estate strategy. Moreover the group is keen to diversify its businesses across key geographical markets and in its investment portfolio, and therefore deliver sustained and strong growth in earnings.

Currently, the Group has a total of 10 operating companies in Kenya, Uganda, South Sudan and Rwanda, with a total premium income in excess of Sh7 billion and total assets in excess of Sh22 billion.

The UAP Group also owns commercial properties in Kenya, Uganda and South Sudan with total lettable space in excess of 1 million square feet.

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