The man who will run Kurwitu Ventures following its public listing by introduction at the Nairobi Securities Exchange (NSE) on Thursday is also its controlling shareholder.
Managing Director Abdirahman Abdillahi holds a majority stake of 51 per cent while fellow director Mohammed Hassan owns 27 per cent, the firm revealed in their listing documents. Their combined stake will be valued at about Sh100 million after Thursday’s listing.
The two men's grip on the Sharia-compliant investment vehicle could prove to be a barrier to wider investor interest in addition to the Sh1,250 listing price. The firm has, however, said it only expects to attract “sophisticated investors who understand our business model and the risks (involved)”.
The listing price was deliberately set high in line with international best practice to discourage uninformed investors from putting money in a high-risk investment without sufficient diligence, it says.
Mr Abdillahi and Mr Hassan are both former executives of Dyer and Blair investment bank. Hassan chairs the board of National Bank of Kenya.
Thanks to his controlling stake, Mr Abdillahi “has the capacity by law to pass an ordinary resolution without seeking approval from the rest of the shareholders”, the firm warns in a listing statement seen by BDAfrica.com.
“In addition, he can have a special resolution passed with the assistance of only one other shareholder, Mohammed A Hassan.”
Three other shareholders, Ali Daud Mohamed, Noordin M Haji and Anas Ibrahim Hussein, hold stakes of four per cent each. While they are free to sell off their shares immediately, Mr Abdillahi and Mr Hassan have committed not to offload more than 25 per cent of their shareholding for a year after listing.
“The two largest shareholders intend to reduce their holding by at least 8 per cent in the next six months to increase the free float,” Kurwitu says.
The firm’s main listed assets are three parcels of freehold land in Lamu County, purchased for Sh102 million last year. The total assets of the company at December 31, 2013 were valued at Sh107,428,889.
Other big names tied to the firm include Mr Abdikadir Mohamed, a senior presidential advisor on constitutional and legal affairs and joint chairman of the presidential task force on parastatal reform, and Ms Sumayya Athmani, MD of National Oil of Kenya. Mr Mohammed will chair the firm’s board.
The NSE launched its Growth Enterprise Markets Segment (GEMS) in January last year to enable small and medium-sized firms to raise capital from the markets. The firms need not be profitable and are only required to show audited accounts for one year as well as evidence they have enough working capital to support their business plans for 12 months after listing.
The minimum share capital requirement is Sh10 million. Kurwitu Ventures will be joining Home Afrika and Flame Tree Group in listing on the GEMS.