BK Group PLC has received approval from Capital Market Authority (CMA) and the Rwanda Stock Exchange (RSE) to issue rights to existing shareholders in the process of cross-listing.
This is one of the stages in ongoing efforts to cross-list on Nairobi Securities Exchange which will end by November 30.
The group is offering a total of 222,222,222 new ordinary shares at Rwf270 per ordinary share offer price to raise approximately Rwf60b before expenses in new equity capital.
Existing shareholders have priority and the right to subscribe for one new ordinary share for every three ordinary shares held on Wednesday, October 24, 2018.
According to a notice signed by Emmanuel Nkusi, the Group’s Company Secretary on conclusion of the Rights Issue, BK’s shares will be cross listed on the Nairobi Securities Exchange (NSE) subject to the final approval of Capital Markets Authority Kenya and the Nairobi Securities Exchange.
Listing of the new shares on the RSE, Cross Listing on the NSE and commencement of trading on both markets will be on November 30, 2018.
The Group is also currently conducting roadshows to raise awareness and interest among investors in their international market.
The move was approved by the Annual General Meeting held in May.
The move will see investors interested in acquiring the lender’s shares have the options of trading in Kigali or in Nairobi.
Trading on Nairobi Securities Exchange – the biggest in the region – could see BK Group have a larger access to investors from the international market.
International investors often face compliance issues as there are no international custodians as is the case in Nairobi Securities Exchange.
The Nairobi Securities Exchange presents the advantage of custodians such as Barclays and HSBC, allowing international investors to trade local shares.
The Group will also benefit from increased liquidity listing in NSE as it has a higher turnover compared to the Rwanda Stock Exchange.
The process is expected to increase between $60m-$70m with a section of it earmarked for continued digitisation of the Group’s operations.
The Rwanda Stock Exchange has a daily turnover of between $15,000 and $20,000, while Nairobi Securities exchange has a turnover of about $7m a day.
The Group registered a net income of Rwf13.4b (about $ 15.4 million) in the first half of 2018 and projected post-tax profits of about Rwf28b profit at the end of 2018.