Asset manager Amana Capital will hold its annual shareholder meeting on September 25, with unit trust holders who lost money in collapsed retailer Nakumatt’s commercial paper being given the option of taking up an equity stake in the fund as compensation.
The meeting, according to a notice, will seek the nod of the unitholders on a new roadmap over resolution of investor losses tied to the commercial paper, with three options on the table.
Amana revealed that they will be offered the option of recovering their investment through acquisition of a 30 percent equity stake in the asset manager.
"We have been coordinating with CMA (Capital Markets Authority) (and) we have made some positive advancement which we will be happy to share in the coming few days," Amana director Graham Shaw told the Business Daily on Wednesday, without divulging further details.
The firm added that it is also looking to invite a new investor into the company and to take legal actions against parties directly related to the Nakumatt commercial paper programme.
Under the deal, the new investor would take up to a 60 percent stake in the fund manager, and if the unit trust holders also take up their equity offer, existing shareholders would be left holding just 10 percent of the firm.
"The new investor will through its local networks attract new funding in the targeted amount of Sh300 million to be managed by ACL as the fund manager," said Amana.
Amana recently disclosed that Sh255 million of the investment which represents 59 percent of the investment, had been impaired and it is this loss that is being compensated through the equity offer.
A 59 percent impairment effectively means an equivalent haircut in the value of original investments for the unit holders, with for instance, an investor who had invested Sh10,000 in the fund standing to lose Sh5,900 following the impairment.
Amana’s shilling fund has remained frozen over the last two years. This has frustrated clients who had been accustomed to recalling their capital in a matter of days when entering similar investment vehicles.
The total unit share value in the Amana shilling Fund is Sh434 million.
Besides the now impaired assets, 91 percent (about 163 million) of the remaining amount is held in fixed deposits at Kingdom Bank ( formerly Jamii Bora Bank) while 3.9 percent (Sh16 million) of the remaining amount has been invested in fixed deposits at Co-operative Bank and I&M Bank.
"Amana Capital will remain in touch with the management at the newly named bank and will be seeking a tranche payment schedule for the outstanding maturities which will then be communicated to the unit holders," said the firm.