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A dozen suitors line up to buy Chase Bank

Chase Bank customers conduct business at one of its branches. FILE PHOTO | LABAN WALLOGA
Chase Bank customers conduct business at one of its branches. FILE PHOTO | LABAN WALLOGA 

A total of twelve local and foreign financial institutions have bid to purchase a majority stake in Chase Bank Ltd (CBL), the Central Bank of Kenya (CBK) has revealed.

They include four unnamed international commercial banks, three local lenders and five financial groups.

Of the dozen interested parties, an unnamed number had been shortlisted as qualifying investors, which sees them to the next stage of vying for a piece of the lender.

"A total of 12 replies to the EOI (Expression of Interest) were received. The respondents comprised of three Kenyan banks, four foreign banks, and five other financial institutions and consortia," said CBK Wednesday evening in an update of the process in which it is seeking to sell Chase Bank as part of a restructuring plan.

“The evaluation of the EOIs has now been completed and a shortlist of qualifying investors has been identified,” it added.

Access restricted data

CBK said the shortlisted investors will be granted access to “comprehensive confidential data” that will allow them to develop a formal proposal for taking an equity interest in CBL.

The interested parties have been requested to submit their formal proposals by June 9 this year.

To come up with the final shortlist, CBK said it ensured candidates have the capacity to ensure a speedy and optimal recovery for depositors, creditors and other stakeholders of Chase Bank.

The banking sector regulator expects to seal a deal with the successful bidder by the end of quarter one.

Chase Bank was placed under receivership in April last year following a run on deposits after reports of liquidity problems spread to the public.



L-R: Chase Bank former chairman Zafrullah Khan, lawyer Cecil Miller and former Chase Bank group MD Duncan Kabui at a hearing with the National Assembly Finance Committee on June 9, 2016. FILE PHOTO | DIANA NGILA | NMG
L-R: Chase Bank former chairman Zafrullah Khan, lawyer Cecil Miller and former Chase Bank group MD Duncan Kabui at a hearing with the National Assembly Finance Committee on June 9, 2016. FILE PHOTO | DIANA NGILA | NMG

A sale will reduce main shareholders of the previously fast-growing bank, including former chairman Zafrullah Khan, into minority owners.

“The process and timing beyond June 26, 2017, will be informed by the structure proposed in the preferred investor proposal, but is currently intended that any resultant transaction will be completed before September 30, 2017,” said CBK in an earlier statement.

The selected investor would have to inject capital to raise Chase Bank’s equity under the restructuring being pursued by the regulator.

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