CMA approves NIC Bank Rights Issue
Nairobi September 23, 2014…The Capital Markets Authority (CMA) has approved a rights issue for NIC Bank Limited in accordance with the requirements of Regulation 11 of the Fourth Schedule to the Capital Markets (Securities) (Public Offers, Listing and Disclosure) Regulations, 2002.
The approval will allow the bank to raise funds from the capital markets through a rights issue for the third time in seven years. In 2007, the bank raised Kshs1.1 billion through a rights issue that was oversubscribed by 49 percent, followed by a second rights issue in 2012 through which a further Kshs2.1 billion was raised, recording a 238 percent subscription rate.
This approval will allow the commercial lender to issue and list an additional 42,663,040 ordinary shares at a rights issue price to be announced by the Company to shareholders of ordinary shares of NIC Bank Limited on the register of its members at the close business on October 2, 2014. Through the capital raising exercise, the bank expects to raise Kshs2.1 billion for the purpose of expanding its capital base. The rights issue will open on Thursday, October 23rd, 2014 and close on Monday, November 17th, 2014.
While announcing the approval the CMA noted that, it has reviewed the disclosures by NIC Bank Limited and is satisfied that all the requirements have been met in accordance with the Fourth schedule of Capital Markets (Securities) (Public Offers, Listings and Disclosures) 2002.’
A rights issue is an offer given by a company to existing shareholders to buy a proportional number of additional shares at a given price, within a fixed period. Rights are often transferable and a shareholder may sell them on the open market.