Capital Markets

Kidero buys stake worth Sh100m in Family Bank

Aspirant for the Nairobi Governor’s seat Evans Kidero has bought 1.3 per cent stake in Family Bank. Photo/JAYNE NGARI
Aspirant for the Nairobi Governor’s seat Evans Kidero has bought 1.3 per cent stake in Family Bank. Photo/JAYNE NGARI  Nation Media Group

Former Mumias Sugar chief executive and aspirant for the Nairobi Governor’s seat Evans Kidero has bought a significant stake in Family Bank that is estimated to be worth more than Sh100 million.

An information memorandum on Family Bank’s ongoing rights issue shows that Mr Kidero has bought nearly 3.2 million shares of the lender, which are currently valued at between Sh122 million and Sh109 million based on the market price of the bank’s shares this year.

Mr Kidero did not appear among the top 10 shareholders of the bank in a similar information memorandum that was published in 2009, and is therefore likely to have bought the shares within the past three years or increased his shareholding in the period.

Efforts to reach Mr Kidero were unsuccessful as his phone went unanswered.

His holding of 3,198,000 shares is equivalent to a 1.3 per cent stake of the bank, and is the most notable change in Family Bank’s top shareholders’ roll, besides the private equity fund Africinvest and FMO whose share purchase was made public in 2010.

The lender’s shares have been trading at between Sh34 and Sh38 at the over-the-counter (OTC) market since the beginning of the year, according to the information memorandum.

Family Bank’s net profit dropped marginally to Sh354.6 million last year from Sh354.69 million in 2010, on high operating expenses that increased to Sh3.24 billion from Sh2.6 billion.

The lender, which is yet to announce its half-year performance, has 243,142,441.50 issued and fully paid out shares.

The rights issue will add 40,348,740 new ordinary shares, whose price will be determined by buyer demand through a process called book building.

The information memorandum shows that the stakes held by Family Bank’s major shareholders have reduced, increased or held constant since 2009.

Admission of Tunis-based Africinvest, Netherlands’ FMO, and Norway’s Norfund, which made a joint equity investment of Sh1 billion in the bank in 2010, is also reflected in the top shareholders’ list.

The transaction, which saw the entities acquire a 22.4 per cent stake in the bank, also saw the creation of 54 million additional shares of the lender.

The estate of Rachel N Muya, with 41,785.988 shares, represented a 24.16 per cent stake in 2009 but now represents a 17.3 per cent stake.
Nancy Wanjiku Nyagah’s 24,737,305 shares represented a 14.31 per cent stake which is now down to 10.2 per cent.

Similarly Family Bank chairman Titus Kiondo Muya had 16,224,318 shares representing a 9.38 per cent stake but while the number of shares he holds has increased to 16,476,407 his stake has reduced to 6.8 per cent.

Daykio Plantations had 7,015,768 shares representing a 4.06 per cent stake but this has increased to 7,023,262 shares, representing a decreased stake of 2.9 per cent. Julius Kiondo had 8,362,198 shares representing a 4.84 per cent stake but this has reduced to 3.5 per cent.

Employees of the bank are also set to become owners through an Employee Share Ownership Scheme (ESOP).

“During the Annual General Meeting held on August 5, 2011 the shareholders approved the setting up of an Employee Share Ownership Scheme (ESOP) as an incentive to staff and to attract and retain skilled staff.

The ESOP (still in formation) will not exceed five per cent of the Bank’s issued ordinary share capital at any time,” says the information memorandum.

As at the end of 2011 the bank had 1,154 full time, permanent employees and 82 temporary staff.

Other lenders already have ESOPs. KCB this week announced plans to increase the number of shares of the bank that its employees are entitled to buy.

The Capital Markets Authority approved KCB’s intention to add 1,594,200 shares under its ESOP.