Housing Finance raises Sh3.5bn in rights issue

Mortgage lender Housing Finance has raised Sh3.5 billion through a rights issue that saw its shareholders offer up to Sh9 billion to the company, representing 2.6 times what it had asked for.

HF had priced the cash call at Sh30 per share, offering 116.6 million new shares at one for every two held.

This represented a significant discount to the firm’s share price at the Nairobi Securities Exchange, where it closed trading at Sh38.7 on Wednesday.

Shareholders applied for a total of 98.2 million shares worth Sh2.9 billion in the original allotment, representing an 84 per cent subscription rate as a section of shareholders failed to take up their rights.

HF, however, received applications for additional 202.1 million shares worth Sh6 billion from shareholders, but will take only Sh3.5 billion.

“The untaken rights will be allocated on a pro rata basis to eligible shareholders who have applied for additional shares according to their rights entitlement,” HF said in a statement.

Shareholders had the right to give up, transfer, or sell all or part of their rights in the cash call. 

The firm plans to use the proceeds to expand its lending capacity in the mortgage finance segment, where it is competing with other top lenders like KCB.

HF also plans to grow its presence in the country, with an estimated Sh175 million earmarked to fund the opening of seven new branches this year.