• About Us
  • Archives
  • SWG Registration
Samrack Media
Mahiga Homes
  • Home
  • ALL NEWS
  • Diaspora
  • Africa
    • AFRICA
    • KENYA
  • BUSINESS
    • BUSINESS
    • INVESTMENTS
    • REAL ESTATE
    • TECHNOLOGY
  • Politics
  • Health
    • HEALTH
    • EDUCATION
  • Religion
  • People
    • PEOPLE
    • LIFESTYLE
    • RELATIONSHIPS
  • Obituaries
  • Videos
  • Events
No Result
View All Result
  • Home
  • ALL NEWS
  • Diaspora
  • Africa
    • AFRICA
    • KENYA
  • BUSINESS
    • BUSINESS
    • INVESTMENTS
    • REAL ESTATE
    • TECHNOLOGY
  • Politics
  • Health
    • HEALTH
    • EDUCATION
  • Religion
  • People
    • PEOPLE
    • LIFESTYLE
    • RELATIONSHIPS
  • Obituaries
  • Videos
  • Events
No Result
View All Result
Samrack Media
No Result
View All Result

Nyachae-linked bank seeks Sh5.4bn diaspora buyout

samrack by samrack
April 20, 2016
in 2016, Africa, Banking, Business, Diaspora, F.E.P, Kenya, Kenya Diaspora News, News, U.S Diaspora
A A
0
Nyachae-linked bank seeks Sh5.4bn diaspora buyout
Share this
FacebookTwitterPinterestEmailWhatsAppLinkedIn
Credit Bank Limited chairman Simeon Nyachae addresses guests during the Credit Bank Limited brand identity launch cocktail at Sankara hotel on September 07 2010. Photo/FILE  NATION MEDIS GROUP

Nyachae-linked bank seeks Sh5.4bn diaspora buyout

  • The team handling the Credit Bank private placement are Dyer & Blair Investment Bank (transaction adviser), Mboya Wangong’u & Waiyaki Advocates (legal adviser), PricewaterhouseCoopers (reporting accountant), and C&R Group as share registrars.
  • The diaspora queries forced Credit Bank and FEP to cancel a planned tour to market the offer in cities such as such as London, Boston, Texas, and Seattle.

Nyachae family-linked Credit Bank is seeking an additional Sh5.4 billion from an investment group for it to take control of the third-tier lender.

The bank is wooing Fountain Enterprises Programme (FEP) to buy 30 million newly created shares — equivalent to 70 per cent of Credit Bank — via a private offer priced at Sh180 apiece and limited to members of the chama (investment club) which has a large following in the UK and US.

A section of the diaspora has opposed the deal leading to recent cancellation of a road show abroad.

FEP, which last year acquired a five per cent stake in Credit Bank after investing Sh120.5 million in a restricted offer, is seeking to take control of the lender despite queries from diaspora members on the valuation and viability of the acquisition.

“The additional capital raised through this private placement will be used to fund the expansion of the business, both locally and regionally, and ensure that we continue to deliver seamless service to our customers,” said Credit Bank chairman Simeon Nyachae in the prospectus seen by the Business Daily.

READ: Nyachae bank faces Sh2.3 billion vandalism claim in loan row

Mr Nyachae’s wife, Grace Wamuyu, also sits on the board of Credit Bank which has seven members including chief executive Chege Thumbi, Orient Bank Uganda co-founder Ketan Morjaria, and career banker Robinson Gachogu.

Credit Bank, with 14 outlets in Kenya, was in the red for the second consecutive year with a loss of Sh59.7 million in the period to December 2015 compared to a Sh91.7 million net loss a year earlier.

Buying at a premium

The team handling the Credit Bank private placement are Dyer & Blair Investment Bank (transaction adviser), Mboya Wangong’u & Waiyaki Advocates (legal adviser), PricewaterhouseCoopers (reporting accountant), and C&R Group as share registrars.

FEP members are buying the Credit Bank shares at a premium of 80 per cent considering the lender’s net asset value is Sh100 per share.

Assuming full uptake of the offer, Credit Bank will have 43.39 million issued and fully paid up shares, in what values the small lender at Sh7.8 billion.

Credit Bank had net assets (total shareholders’ funds) standing at Sh1.39 billion as at December 2015 that would value the lender at Sh4.8 billion going by Atlas Mara’s criteria which gives a 3.5 multiple on book value for those eyeing to acquire Kenyan banks.

It is these sharp differences on valuations and the financial health of Credit Bank that has seen a section of FEP diaspora members protest against the purchase of the lender, saying it was done without their knowledge.

“I did not know that FEP had invested in the bank before I read this offer. The board of directors of a company most important responsibility is to keep the shareholders who founded the company informed of any investments and plans,” said US diaspora members dubbed “Okoa FEP” in a protest note to the chama.

The diaspora queries forced Credit Bank and FEP to cancel a planned tour to market the offer in cities such as such as London, Boston, Texas, and Seattle.

Central Bank’s decision to freeze issuance of new banking licences has meant those eyeing the sector must acquire existing players, leading to high valuation of Kenyan lenders, according to an analyst.

“Freezing the issuance of new licenses has meant a rise in the value of the licence to beyond its intrinsic valuation based on traditional models such as price-to-book,” said Deepak Dave of Riverside Capital, a risk management firm.

“The focus should be on what the licence buyer intends to do rather than how much is being paid. For example, what is the means by which someone will generate the 40 per cent-plus RoE that will be needed to justify a price-to-book ratio of over three times?” he posed.
hdavid@ke.nationmedia.com

 Source:http://www.businessdailyafrica.com

 

 

Tags: and career banker Robinson Gachogu.Credit Bank chairman Simeon NyachaeCredit Bank private placement are Dyer & Blair Investment Bank (transaction adviser)FEPFountain Enterprises Programme (FEP)Grace Wamuyuhttp://www.businessdailyafrica.com/Nyachae-linked-bank-seeks-Sh5-4bn-diaspora-buyout/-/539552/3166580/-/item/1/-/15mma1u/-/index.htmlMr Nyachae’s wifeNyachae bank faces Sh2.3 billion vandalism claim in loan rowNyachae-linked bank seeks Sh5.4bn diaspora buyoutOrient Bank Uganda co-founder Ketan Morjariawhich last year acquired a five per cent stake in Credit Bank after investing Sh120.5 million in a restricted offer
Previous Post

TRANSITION/DEATH/ANNOUNCEMENT OF CHARLES Mbuguiro Ndungu of Lowell,Massachusetts

Next Post

Chase Bank to reopen on Wednesday, KCB acquires majority stake

Related Posts

DP Ruto picks Rigathi Gachagua as his running mate
Kenya

DP Ruto picks Rigathi Gachagua as his running mate

May 15, 2022
Muteshi Land Grabbing Case Haunts Ruto
Business

Muteshi Land Grabbing Case Haunts Ruto

May 13, 2022
Boyfriend of Missing US-based Kenyan Woman Considered a ‘Person of Interest’ in Her Disappearance
Diaspora

Boyfriend of Missing US-based Kenyan Woman Considered a ‘Person of Interest’ in Her Disappearance

May 13, 2022
Five Reasons Why Real Estate Increases in Value
Business

Five Reasons Why Real Estate Increases in Value

May 13, 2022
Kenya:9,484 children were defiled last year— Health ministry
Health

Kenya:9,484 children were defiled last year— Health ministry

May 13, 2022
Standoff at JKIA After Family Refuses to Pick Body of Kin Who Died in Saudi Arabia
Diaspora

Standoff at JKIA After Family Refuses to Pick Body of Kin Who Died in Saudi Arabia

May 12, 2022
Next Post
Chase Bank to reopen on Wednesday, KCB acquires majority stake

Chase Bank to reopen on Wednesday, KCB acquires majority stake

Please login to join discussion
Job Openings Below is a list of current job openings at Northeast Clinical Services, Inc.. Please click on an opening in the list to view details and apply. Job Openings Below is a list of current job openings at Northeast Clinical Services, Inc.. Please click on an opening in the list to view details and apply. Job Openings Below is a list of current job openings at Northeast Clinical Services, Inc.. Please click on an opening in the list to view details and apply.
ADVERTISEMENT
ADVERTISEMENT

Latest News

DP Ruto picks Rigathi Gachagua as his running mate

Muteshi Land Grabbing Case Haunts Ruto

Boyfriend of Missing US-based Kenyan Woman Considered a ‘Person of Interest’ in Her Disappearance

Five Reasons Why Real Estate Increases in Value

Kenya:9,484 children were defiled last year— Health ministry

Standoff at JKIA After Family Refuses to Pick Body of Kin Who Died in Saudi Arabia

Kenyan Nurse Wins Sh29 Million Global Nursing Award in Dubai

Russia Questions US-Funded Biolab in Kenya

GOVERNOR MUTUA’S BIG BLOW AS TRIBUNAL STOPS HIM FROM EXITING AZIMIO LA UMOJA ONE KENYA COALITION!!

Canada Issues Travel Advisory to Its Citizens in Kenya

We are grateful for your monthly or one-off donations To Samrack Media: Cash App No: 781-888-8770 $SAMRACK001

Money

New Digital Skills Helps Unemployed Kenyan Youth Earn In Cryptocurrency

New Digital Skills Helps Unemployed Kenyan Youth Earn In Cryptocurrency

by samrack
November 19, 2021
0

New Digital Skills Helps Unemployed Kenyan Youth Earn In Cryptocurrency This week sees the launch of a new initiative to equip...

A simple guide to Government Bonds investing in Kenya

A simple guide to Government Bonds investing in Kenya

by samrack
September 17, 2021
0

A simple guide to Government Bonds investing in Kenya A treasury bond (T-bond) is a medium term to long term...

Politics

GOVERNOR MUTUA’S BIG BLOW AS TRIBUNAL STOPS HIM FROM EXITING AZIMIO LA UMOJA ONE KENYA COALITION!!

GOVERNOR MUTUA’S BIG BLOW AS TRIBUNAL STOPS HIM FROM EXITING AZIMIO LA UMOJA ONE KENYA COALITION!!

by samrack
May 11, 2022
0

GOVERNOR MUTUA'S BIG BLOW AS TRIBUNAL STOPS HIM FROM EXITING AZIMIO LA UMOJA ONE KENYA COALITION!!   Governor Alfred Mutua’s...

You are free to use Nairobi expressway from next Saturday – Uhuru

You are free to use Nairobi expressway from next Saturday – Uhuru

by samrack
May 8, 2022
0

You are free to use Nairobi expressway from next Saturday - Uhuru Other than the ban on photography, skaters, pedestrians,...

  • About Us
  • Archives
  • SWG Registration

© 2021 SAMRACK - Diaspora News & Updates; design by: Samrack.

No Result
View All Result
  • Home
  • ALL NEWS
  • Diaspora
  • Africa
    • AFRICA
    • KENYA
  • BUSINESS
    • BUSINESS
    • INVESTMENTS
    • REAL ESTATE
    • TECHNOLOGY
  • Politics
  • Health
    • HEALTH
    • EDUCATION
  • Religion
  • People
    • PEOPLE
    • LIFESTYLE
    • RELATIONSHIPS
  • Obituaries
  • Videos
  • Events

© 2021 SAMRACK - Diaspora News & Updates; design by: Samrack.

Page generated in 0.852 seconds. Stats plugin by www.blog.ca