NIC Bank’s rights issue has been oversubscribed by 238 per cent, managing to attract Sh7 billion in offers against the Sh2 billion it had sought.
The bank’s management said that it had expected that it would get the Sh2 billion but the oversubscription by more than two times beat initial estimates.
“Although the board of directors was confident that the group would achieve full subscription, we did not anticipate that our shareholders and investors would commit more than three times the amount we targeted to raise,” said chief executive James Macharia.
The bank managed to raise the Sh2 billion in a rights issue that entitled shareholders to buy one share for every four held at a discounted price of Sh21.
The Sh21 rights price was a 22.4 per cent discount on the weighted average trading price over 6 months to the period ending February 24.
The Sh2 billion raised will allow the bank to expand within the region, update its banking platform and open more branches in countries it operates.
Regional expansion has seen the bank set up shop in Uganda through a subsidiary, NIC Uganda which began operations on June 1.
NIC is also present in Tanzania through NIC Tanzania, a partly-owned subsidiary.
The right issue will see the issue of 98 million shares which will begin trading on October 23
NIC becomes the second bank to have an oversubscribed rights issue after DTB managed to attract Sh3.36 billion in applications against the Sh1.8 billion that it was seeking in its August rights issue.