9 January 2013

Kenya: SMEP Misses Share Offer Target By 80 Percent

Church-owned micro-finance institution SMEP DTM failed to reach its share sale target in the recently concluded public offer only managing to raise 16 per cent of the projected amount.

The company raised Sh266.7 million out of the target Sh1.6 billion. It managed to sell 24.2 million out of the 145.5 million shares it put up for sale. But it said it is open to sell more shares in the next three years open.

With the conclusion of the offer, NCCK has reduced its control of the micro-finance by 26.28 per cent in line with the conditions set by the Central Bank of Kenya.

CBK gave the NCCK until 2014 to keep its ownership at a maximum of 25 per cent in SMEP in line with regulations that bars investors who are not banks, foreign finance companies or the government, from owning more than a quarter of Kenya's banks. The NCCK and five other individuals own 36.86 per cent, Small and Micro Enterprise Program (its fully owned company) 36.86 per cent and the new shareholders have 26.2 per cent

"SMEP DTM will continue engaging with the various potential stakeholders it interacted with during the offer for subscription as regards future equity, debt or other alternative financing for SMEP DTM business plan 2012-2016," said Sam Owuor, the company secretary in a public statement.

The public offer, which was conducted between October 10 and November 30, was restricted to church-affiliated institutions, individuals and its customers. Each share cost Sh11.

"The net funds will largely be used to enhance the working capital," said Owuor.

It planned to use Sh300 million for an office complex, Sh200 million to upgrade branches to CBK standards and open new ones, Sh200 million for a new banking system and ICT and Sh900 million as working capital. Implementation of these plans is now not certain.

SMEP last month announced plans to convert to fully licensed bank to conduct business as a commercial bank in the future as the "first Christian Bank". It also has plans to hold an Initial Public Offer.

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