Centum Investment Company is set to appoint seven new board members to K-Rep Bank, giving it control of the lender’s boardroom which will constitute 11 directors.
The NSE-listed firm, which Thursday reported a 37.8 per cent growth in half-year net profit to Sh1.23 billion, also announced that it had completed the acquisition of a 67.54 per cent controlling stake in K-Rep Bank.
The boardroom shake-up is intended to give Centum managerial and strategic control of the bank.
James Mworia, the managing director of Centum, said the new directors will be announced “soon”, once the incumbent board members have finalised their resignations.
“We have brought on board new directors, their names were submitted to the Central Bank of Kenya (CBK),” said Mr Mworia after release of his company’s half-year results Thursday. “We will make a formal announcement about the new board soon.”
Kenny Nwosu, a director at Equator Capital Partners, is the current K-Rep board chairman while Albert Ruturi, a career banker, is the managing director.
David Masika, the Lloyd Masika chairman, Christine Sabwa (a Bharti Airtel director) and Rafael Jabba (an investment officer at the African Development Bank) are also members.
The incumbent team also consists of Lazarus Kimang’a, the company secretary of East Africa Re, Patricia Kiwanuka, a retirement benefits expert, and Mildred Owuor, another career banker.
Willem Enklaar was also in the board on behalf of Dutch lender Triodos Bank, which until the buyout transaction, owned 14.48 per cent of K-Rep, which it has since sold.
Centum did not disclose who among the directors would be leaving or retained in its expanded board, only stating that the expansion of the board to 11 members will be done at a “later date”. Three of the appointees will be independent directors in line with CBK corporate governance guidelines.
The K-Rep board reorganisation is a culmination of a buyout negotiations which begun in July.
Centum offered Sh2.5 billion to buy a majority stake in K-Rep, effectively pricing the bank at about Sh3.8 billion and triggering the exit of shareholders like IFC and Triodos Bank.
While Centum lapped up the freed up shares, K-Rep Group – the founder shareholder of the bank – increased their stake to 31.52 per cent from 19.74 per cent.
K-Rep had Sh13.7 billion in total assets as at June 30 this year, with 230,000 deposit accounts and 47,000 loan accounts – giving it a market share of 1.5 per cent of the banking credit market in Kenya.
The bank has 36 branches which handle over 200,000 largely small-business customers.
Centum divulged that it would soon be convening a meeting to prepare a post-acquisition strategy since, with the aim of transforming the business into a strong tier two lender.
“Based on the growth plans, K-Rep will require additional capital to be able to grow its total assets,” said Fred Murimi, Centum’s corporate affairs director.
“Centum will provide the bank with access to capital. No decision has been made as to whether it will be a rights issue or debt.”
Centum’s investment income for the six months to September hit Sh1.89 billion, a 58.8 per cent improvement from last year’s Sh1.19 billion.
The investment firm, which has interests in several firms UAP Holdings, AON Insurance Brokers, Rea Vipingo, three Coca-Cola bottlers among several others, has a portfolio worth Sh32 billion.