The club of billionaire directors at the Nairobi bourse is set to widen with the entry of two directors of I&M Bank as the mid-tier lender prepares to be admitted at the stock market in June.
I&M Bank will earn automatic listing following its merger with listed investment firm City Trust in a share swap transaction worth Sh29 billion.
Regulatory filings show that I&M Bank directors Sarit Shah will own shares worth Sh1.1 billion and Sachit Shah shares worth Sh1.09 billion based on their shareholding and current trading price of City Trust shares.
This will see them join the directors’ billionaire club that includes businessman Chris Kirubi (Centum Investment), Pradeep Paunrana (Athi River Mining), James Mwangi (Equity Bank), Jimnah Mbaru (Britam) and Scangroup’s Bharat Thakrar.
Sarit, an executive director at the bank will own 3.45 per cent, while Sachit will own 3.43 per cent in a new company called I&M Holdings that will list at the Nairobi Securities Exchange (NSE) on June 11.
Under the merger, shareholders in the larger I&M Bank will be offered 13.62 shares in the investment firm for every share they hold in the bank in what will see the investors granted 363,722,034 new City Trust shares in the reverse takeover.
The new City Trust shares will be offered after the split of the stock into five parts, valuing each at Sh81.40 based on current trading prices of Sh407. This values the holding company at Sh32 billion.
“Upon completion of the transaction, the direct and indirect shareholding in CTL (City Trust) of Mr Sarit Shah and Suresh Shah will remain unchanged at 3.45 per cent and 3.43 per cent respectively,” said an offer document guiding the merger.
City Trust is listed on the alternative market segment of the NSE and its deal with I&M Bank will help it to meet the minimum capital threshold required for listing on the main stocks market.
The investment firm had a paid share capital of Sh28.6 million in July, which was below the threshold of Sh50 million required to list on the main investment segment of the NSE. The combined unit will have a share capital in excess of Sh2.8 billion.
The listing will allow shareholders of I&M Bank, including two of Europe’s largest development finance institutions Proparco and DEG and individuals like Sarit and Sachit, a perfect platform to easily sell their shares given that they are not among the investors whom the regulator has barred from selling more than half their shares within two years from June.
Mr Mbaru’s 279.3 million shares in British America are currently worth Sh1.74 billion, Mr Mwangi’s 3.45 per cent stake in Equity is now valued at Sh3.3 billion and Mr Thakrar’s 18.19 per cent stake in Scangroup is worth Sh3.49 billion.
Mr Kirubi’s 115.5 million shares in Centum Investment are worth Sh1.49 billion.