From left: Flame Tree Group non-executive director Frank Ireri, chairman George Theobald and MD Heril Bangera address the Press at the Sarova Stanley Hotel, Nairobi, October 30, 2014. PHOTO | JEFF ANGOTE
What you need to know:
Flame Tree Group will list 190 million shares at a price of Sh8 each on November 6 after it received regulatory approval.
Flame Tree Group will list on the Growth and Enterprises Market Segment (GEMS) next week, adding Sh1.52 billion valuation to the NSE.
The firm will list 190 million shares at a price of Sh8 each on November 6 after it received regulatory approval.
This comes as it concluded a private placement that has brought in new shareholders into the company previously fully owned by founder and managing director Heril Bangera.
Lead transaction advisors Burbidge Capital said the issue achieved a subscription rate of 158 per cent.
“We had an oversubscribed placing which closed raising Sh194 million, that translates to an issue of 24.3 million shares mostly subscribed by local institutional and individual investors,” said Burbidge Capital founder and CEO Edward Burbidge.
“Because of the oversubscription, there is a lot of money returned to investors, and therefore we expect to see that pushing the liquidity in the secondary market.”
Kenya’s private placement laws limit the offer to a maximum of 100 investors, who are expected to be sufficiently knowledgeable to understand the risk involved in accepting the offer.
Mr Bangera retains an 85 per cent stake in the company following the placement that after listing will be held under a two-year lock-in, in which he cannot take his shareholding below 65 per cent of the company.
“The money we have raised in the private placement will go towards working capital as we seek to increase the market share by expanding FMCG capacity and our regional footprint,” said Mr Bangera.
Mr Bangera founded the company under the name Roto Moulders Ltd in 1989 as an 18-year old with a startup capital of Sh500,000.
In 2003 Roto evolved to become the Flame Tree Group, a diversified consumer goods maker which produces household brands such as Roto Tanks, Zoe beauty products and Happy Golden snacks.
The company has been recording an annual turnover of between Sh1.6 billion and Sh2 billion from its operations in Eastern Africa, with a workforce of 1,000 employees.
Ahead of the GEMS listing, Flame Tree has already picked Housing Finance managing director Frank Ireri as a non-executive director and George Theobald as chairman.
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