Centum Investment Company Plc received Sh3.2 billion for its 64 percent stake in Sidian Bank in October 2023, leaving it with a minority ownership that has been diluted from a series of rights issues implemented by the lender.
The Nairobi Securities Exchange-listed firm previously owned a controlling 83.4 percent stake in Sidian before it started looking for buyers to acquire its shares.
Centum initially signed an agreement with Nigeria’s Access Bank but the deal fell through, with the investment firm subsequently selling most of its shares in Sidian to multiple institutions.
“We previously held 84 percent of the shares and sold 64 percent for Sh3.2 billion, leaving us with 20 percent,” Centum’s chief executive James Mworia told Business Daily.
“The current 14 percent is not a further sale of the 20 percent, but rather a temporary dilution resulting from the bank issuing shares to shareholders who have already participated in the rights issue,” he clarified.
The Sidian shares sold by Centum have been transferred to the buyers gradually as they receive regulatory approval from the Central Bank of Kenya (CBK), Mr Mworia said.
Centum previously held a stake of 83.4 percent in the bank, which dropped to 40 percent in March 2024 before declining further to 29.26 percent in December 2024.
“Sh3.2 billion is the total proceeds. The transfers were done as CBK approvals were received,” Mr Mworia said earlier.
Sellers of shares in private firms are often paid in full and the buyers are left to go through the process of formally registering the stakes in their names, a process that can take more than a year.
South Africa’s Old Mutual, for instance, paid some of the former shareholders of UAP Holdings well in advance of taking formal ownership of their shares in 2020.
The Sh3.2 billion received by Centum for the 64 percent Sidian stake represented a premium of 59 percent compared to what was the most recent assessment of the value of the shares at the time.
Centum sold the Sidian shares to multiple buyers including Pioneer General Insurance Limited, Wizpro Enterprises Limited and Afram Limited. The ownership structure of the bank has changed on multiple occasions over the past two years due to the exit of Centum and several rights issues aimed at strengthening the lender’s capital base.
The bank in 2024 raised Sh1.9 billion from shareholders—excluding Centum—who injected an additional Sh600 million earlier this year. Sidian announced it was on course to raise an extra Sh500 million from shareholders by the end of June this year.
Centum had earlier planned to sell its Sidian stake to Nigeria’s Access Bank but the parties terminated the agreement after they were unable to renegotiate the terms of the deal.
