NAIROBI, Kenya, Jan 21 – HF Group’s rights issue received an oversubscription of 38.32 percent amid investors high demand.
The financial solutions provider, which held a bell-ringing ceremony today in Nairobi, targeted to raise an additional investment of Sh4.6 billion but received applications of Sh6.38 billion.
Robert Kibaara, the Group’s Chief Executive Officer (CEO), stated that the funds will be used to scale up businesses.
“This significant capital raise is a cornerstone of HF Group’s five-year strategy. 85 percent of these funds will be invested in scaling up the business that we have created, and which is already profitable. 15 percent of the funds will be invested in technology and digitization of the business to enhance efficiency and customer experience,” said Kibaara.
The rights issue, priced at Sh4 per share, was structured to offer shareholders two new ordinary shares for every one existing ordinary share held, with the shareholders having the option to apply for additional shares.
In addition, it had a green shoe option of up to 30 percent, equivalent to 384.6 million shares, to accommodate any potential oversubscription.
The grand total number of new shares applied for under the rights issue, including entitlement shares and additional shares, was 1.6 billion, with a total gross value of Sh6.4 billion.
On his part, Frank Mwiti, CEO of the Nairobi Securities Exchange (NSE), said HF Group’s decision to pursue a rights issue stands out as a bold and strategic move, underscoring its confidence in the NSE and the robustness of Kenya’s capital markets.
“I applaud the Group for this bold decision that also reflects a forward-looking approach to strengthening its financial position and serves as a powerful endorsement of the Nairobi Securities Exchange (NSE) as a reliable platform for raising capital in a challenging economic environment,” stated Mwiti.
With this successful capital injection, the Group’s banking subsidiary, HFC, which now sits at Sh8 billion of capital, is now well ahead of the implementation timetable of the recently announced regulatory requirements on capital adequacy.
The bank is also on course to fully comply with the regulatory target that will see banks expected to grow their capital base to Sh10 billion by 2028.
