Kenyans allowed to buy into 19pc I&M Rwanda offering

Rwandan Finance minister Claver Gatete. PHOTO | FILE
Rwandan Finance minister Claver Gatete. PHOTO | FILE 

Rwanda has once again opened up to Kenyan investors an initial public offering (IPO), set to open next week where the government is offloading its 19.8 per cent stake in the local unit of I&M Bank.

Kigali will on Tuesday put on the market the 99 million shares it holds in the subsidiary of Nairobi-headquartered I&M Holdings.

Rwanda’s capital markets regulator said on Thursday Kenyans, as well as all citizens of East African Community states would be free to take part in the public offering, and will be treated as local investors.

“The IPO will be open to East Africans and they will be treated as domestic investors,” said Robert Mathu, executive director at Rwanda’s Capital Market Authority.

The price of the I&M Bank Rwanda public offering will be unveiled on Valentine’s Day and the sale will run until March 3.

I&M Bank Rwanda’s net profit nearly doubled in the nine months to September 2016 to hit Rwf4.61 billion (Sh571 million) from Rwf2.81 billion (Sh349 million) in a similar period a year earlier.

Finance minister Claver Gatete told Parliament on Tuesday that the government expects to earn about Rwf11.5 billion (Sh1.42 billion) from the IPO that will be used to finance construction of the new Bugesera International Airport.

Local investors, seeking escape interest rate caps, can take part in the I&M Bank Rwanda public offering through Nairobi-based stockbrokers and investment banks with a presence in Kigali, including Faida Securities, African Alliance, SBG, and Renaissance Capital.

I&M Bank in July 2012 acquired a 55 per cent stake in Banque Commerciale du Rwanda Ltd and in August the following year rebranded the lender to I&M Bank Rwanda.

Other shareholders at I&M Bank Rwanda are German investment fund DEG and French development lender Proparco who jointly hold 25 per cent, with other local investors holding 0.2 per cent stake.

Baraka Capital, Core Securities and Kenya’s Dyer and Blair Investment Bank are the lead transaction advisers for the deal. Other players are KCB Rwanda (receiving bank and share registrar), Trust Law Chambers (legal advisers), and Deloitte & Touche as the IPO’s accountants.

Rwanda’s move to continue opening its nascent capital markets to EAC investors contrasts with Tanzania, which has blocked regional investors from taking part in share offerings at Dar-es-Salaam bourse.

Kenyans have taken part in all the listings at the fledgling Rwanda Stock Exchange namely Bralirwa in 2010, Bank of Kigali the following year, and Crystal Telecom in 2015, which owns a fifth of MTN Rwanda.

This means I&M Bank will be the fourth local listing at the budding Rwandan bourse. There are three other cross listings of Kenyan firms: Nation Media Group, KCB Group, Uchumi Supermarkets, and Equity Bank.