The law requires that the CBK approves the purchase of a stake above five per cent in a bank.
IFC is set to pay Sh3.55 billion for the stake in Britam.
Britam owns 48.8 per cent of HF, part of which will now be indirectly owned by the IFC once it buys into the insurer.
IFC has also been actively investing in other Kenyan financial firms, either through debt or equity financing.
The International Finance Corporation (IFC) is set to acquire a 5.08 per cent stake in mortgage firm HF (Housing Finance) on completion of buying a 10.37 per cent stake in insurance firm Britam.
Britam owns 48.8 per cent of HF, part of which will now be indirectly owned by the IFC once it buys into the insurer.
People familiar with the matter told the Business Daily that the HF has already sent a notification to the Central Bank of Kenya indicating that it will be seeking the regulator’s approval for the deal to go ahead.
IFC, the private lending arm of the World Bank, is set to pay Sh3.55 billion for the stake in Britam, which will see it allotted 224.18 million shares at Sh15.85 apiece.
The law requires that the CBK approves the purchase of a stake above five per cent in a bank, and would need to also approve the status of IFC as a significant shareholder in HF.
“The proposed subscription is subject to conditions that are customary to transactions of this nature, including receipt of shareholders’ approval and regulatory approvals,” Britam said in a statement when the deal was first announced.
The IFC-Britam deal is also pending the approval of the insurer’s shareholders.
Britam will hold a general meeting on March 24 where its shareholders are expected to ratify the deal.
Britam has held the 48.8 per cent stake in HF since 2015. The insurer previously held a 46 per cent stake in the lender, but raised it by 2.6 per cent after defending its stake in HF’s Sh3.5 billion rights issue that went on sale in 2015.
Britam had in 2014 bought out Equity Bank’s 24.73 per cent stake in HF at a cost of Sh2.78 billion, raising its ownership in the financier to 46.04 per cent from the previous 21.4 per cent.
Other investments
IFC has also been actively investing in other Kenyan financial firms, either through debt or equity financing.
In November, the organisation announced that it would lend Kenya Commercial Bank $75 million (Sh7.7 billion) in subordinated debt to support its growth.
In June, IFC advanced Equity Bank a Sh10 billion loan for lending to small and medium-sized enterprises (SMEs), mainly targeting women entrepreneurs.
It has also lent to and invested money in non-financial sector firms in the past year, including Sh300 million in pharmacy chain Haltons last October to finance expansion.
In August, IFC announced it would lend up to $4.5 million (Sh450 million) to spices and snacks maker Tropical Heat Limited to finance the construction of a new factory on an eight-acre piece of land in Limuru.
IFC said in November that it was seeking to buy a Sh1 billion stake in commercial property company, Africa Logistics Properties (ALP), which was raising Sh7 billion for the development of three warehouses in Tatu, Tilisi and Embakasi.
