The 340 per cent oversubscription was mainly driven by large shareholders of the lender who besides taking up their rights applied for the forfeited shares in the hope of increasing stakes in the mid-tier bank.
The lead transaction advisor for the issue, Standard Investment Bank (SIB), attributed the heavy subscription to the bank’s performance.
The bank had offered some 22 million rights to shareholders at a discounted price of Sh165.
Investors offered Diamond Trust Bank Sh16 billion during its recent rights issue against a demand of Sh3.6 billion to underline investor’s appetite for the counter and huge supply of investible funds.
The 340 per cent oversubscription was mainly driven by large shareholders of the lender who besides taking up their rights applied for the forfeited shares in the hope of increasing stakes in the mid-tier bank.
“The value of the applications has surpassed our target by a significant margin of Sh12.4 billion,” said the banks chief executive Nasim Devji adding that “a significant number of our shareholders controlling nearly 80 per cent of the bank’s equity have taken up their rights.”
The lead transaction advisor for the issue, Standard Investment Bank (SIB), attributed the heavy subscription to the bank’s performance.
“It is really a factor of DTB’s performance as well as the attractive pricing,” said the SIB director for investment banking, Amish Gupta.
The bank had offered some 22 million rights to shareholders at a discounted price of Sh165.
Investors acquiring the rights from the market paid between Sh30.50 and Sh66.50 for them, and with the new shares priced at Sh165, they are set to enjoy a good premium as the counter is currently trading at Sh244 per unit.
DTB wants to use the cash to enter new markets, with eyes on the Democratic Republic of the Congo, Madagascar and Rwanda. Currently the lender operates in Kenya, Uganda, Tanzania and Burundi.
The bank is expected to release its half-year results Thursday morning.
Recent bond issues by Britam Insurance and UAP were also oversubscribed with Britam raising Sh6 billion, which it had planned to raise through two tranches, at a go.
“There is money in the market driven by the expectation of lower interest rates,” said corporate finance and advisory manager at ABC Capital, Johnson Nderi. This will encourage banks expected to raise additional capital to comply with higher statutory requirements.
