Nairobi — The Capital Markets Authority (CMA) has approved the issue of a Sh5 billion corporate bond by the British American Investment Company (Britam) medium term note to be used to fund strategic business initiatives.
The bond will be issued in two tranches with the first amounting to Sh3 billion with the option to take up an additional amount of up to Sh1 billion in a green shoe option, while the second tranche will amount to Sh2 billion.
A green shoe option is where Britam is allowed to float the additional Sh1 billion in the event the initial Sh3 billion offer is oversubscribed.
The company expects to use the funds to support several strategic initiatives including real estate, private equity, local and regional business growth and Information Communication and Technology (ICT) investments.
CMA says Britam has met the eligibility requirements for Public Offering of Fixed Income Securities and Listing on the Fixed Income Securities Market Segment.
"Prior to giving the approval, the Authority reviewed information provided and is satisfied that it meets the eligibility requirements for Public Offering of Fixed Income Securities and Listing on the Fixed Income Securities Market Segment and is satisfied that contained in the second schedule of the Capital Markets (Securities) (Public Offers, Listing and Disclosures) Regulations, 2002," CMA said.
Last month, The company announced some board changes with the retirement of Bocar Elimane Dia who retired by rotation and did not offer himself for re-election as a director of the company.
Tanui Ghulati also stepped down from the directorship of the company. Britam also acquired a 99 percent stake in Real Insurance Company in February 2014.
In 2013 the company recorded a 12 percent rise in its profit before tax to hit Sh3.2 billion for its full year ending December 31, 2013.