Bank of Kigali’s Initial Public Offering (IPO) has been oversubscribed, almost three-fold, reflecting investor confidence in the country's economy, the Minister of Finance John Rwangombwa announced yesterday.
As the country’s second public offer after Bralirwa earlier in the year, BK targeted to raise Rwf 37.5 billion but instead attracted applications worth Rwf103 billion, a subscription rated at 274 percent, the minister said.
The IPO of 300.3 million shares which sold at Rwf125 each, opened on June 30 and closed on July 29, 2011.
Officials from the bank said that during the offer period, the bank attracted applications from both domestic and international investors.
Domestic investors include all East African Community (EAC) investors in general.
“Today, we are happy to announce the overall outcome of the IPO. Retail investors were oversubscribed by 291 percent of what was offered, institutional investors from Rwanda 165 percent, institutional investors from the region 221 percent, international investors 330 percent and BK employees and Management 135 percent,” Rwangombwa announced.
A 40 percent pool was allocated to international investors, 15 percent to regional institutional investors, 15 percent to institutional domestic investors, 27.6 percent to retail investors while 2.4 percent was set aside for staff and management of BK.
“All applicants added up to 6,636 for shares for both retail and institutional investors, of which 4,985 are Rwandans representing 75 percent of the total applicants,” the Minister said.
Rwangombwa noted that it was a good indication that Rwandans are now more active in the Capital Market business.
He observed that the domestic retail investors’ oversubscription of 128 percent demonstrated the interest of the Rwandan people in owning local companies.
“During the offer period, in the first one week, we had already achieved 100 percent subscription which is different from the first offer of Bralirwa where people started buying in the last week of offer,” he explained.
BK’s allotment is set for August 22 and the public listing in the Rwandan Stock Exchange (RSE) is scheduled for August 29.