Key Microfinance Bank, formerly Remu, has extended its search for fresh capital beyond existing shareholders, giving room for strategic investors to inject cash in form of ordinary and preferential shares.
This is meant to boost the ongoing search for Sh276.6 million capital injection through a rights issue offering existing shareholders a chance to pump in cash in exchange for 13.83 million shares valued at Sh20 each.
Chairman Luke Kinoti told Business Daily the micro-financier has received some interest but will officially open the offer from July 31. The original offer ran from May 29 to June 18. Key will pay 9 percent interest to those who respond to the extension.
“We have operated with current shareholders’ money and expensive commercial debt. This is very limited and because of that, we have had to contend with a very thin loan book,” said Mr Kinoti.
“Besides our 254 investors injecting in additional capital, we are also going to invite willing strategic investors to invest in the bank. We are particularly keen on equity investors and also those that may want preferential shares.” Its shareholders had in 2016 identified constrained capital as a key weakness.
The firm is targeting to ride on new capital to grow its loan book by 80 percent to Sh416.6 million this year and post at least Sh3.34 million net profit.
Mr Kinoti says the board extended the rights issue from the Tuesday’s deadline to July 31 after about 70 per cent of the shareholders requested more time. “They now have up to end of July to take up their stake. The board may also allot any shares that will not be taken up to new investors,” he explained.
Anne Otunga, the company secretary, says the micro-lender will give priority to onward lending, marketing, getting new core banking system and upgrading mobile lending platform to meet the 2019/2024 strategic plan.