Belize-based investment firm Barclay Holdings has acquired an additional 4.63 percent stake in Crown Paints Kenya Plc, expanding its majority ownership to 66.68 percent according to April disclosures.
Acquisition of the extra stake, amounting to 6.5 million shares, came after the Nairobi Securities Exchange-listed firm implemented a rights issue last year.
Some shareholders snubbed the cash call that was priced at Sh10 per share, allowing Barclay to take up the additional stocks and raise its stake from 62.05 percent in May last year.
The impact of the rights issue on Crown Paints’ ownership has been disclosed by the company in its latest annual report.
“During the annual general meeting held on October 30, 2020, the company communicated its intention to raise gross proceeds of approximately Sh711.8 million by way of a rights issue,” the firm says in the report.
“On May 7, 2021, the Capital Markets Authority granted approval to the company to undertake the rights issue to raise Sh711.8 million by issuing and listing 71,181,000 new ordinary shares on the Nairobi Securities Exchange. The rights issue process was successfully completed in June 2021.”
Shareholders applied for 64.2 million shares in the rights issue under entitlement, leaving a balance of 6.9 million shares which Barclay and other investors applied for as additional units.
The Belize-based firm owns shares in Crown Paints directly and through its wholly-owned subsidiary Crown Paints and Building Products Limited.
Its direct interest in the paint manufacturer rose to 18.26 percent from 13.63 percent. The ownership of Crown Paints and Building Products Limited was unchanged at 48.42 percent.
CMA had exempted Barclay from takeover regulations in anticipation that it could raise its ownership in the cash call without intending to make a full buyout of the paints manufacturer.
Money raised from the rights is to be used to reduce debt and turn around the fortunes of regional loss-making subsidiaries that have been depending on the Kenyan parent company to finance their operations.
Crown Paints recorded a 21.8 percent increase in net profit to Sh731 million in the year ended December, driven by higher sales.
The company had posted a net income of Sh600 million the year before.
Crown Paints declared a dividend of Sh4 per share or a total of Sh568 million, marking a return to cash returns for shareholders.
The paints manufacturer had gone for two years without declaring dividends, having made a payout of Sh0.6 per share for the year ended December 2018.
The company’s revenue rose 16.7 percent to Sh10.7 billion last year from Sh9.1 billion in 2020. Crown Paints said it incurred rising costs and which have jumped further this year.