Centum raises its stake in K-Rep Bank to 67pc

Investment company Centum has increased its shareholding in K-Rep Bank to 67.54 per cent, making it the majority shareholder in the financial institution.

Centum said in a press statement that its bid to purchase a 66 per cent stake from other shareholders would be completed in the next four months subject to regulatory approval.

“Centum is excited by the intended acquisition, which is in line with our strategic objective to expand presence in the financial services sector,” Centum chief executive James Mworia said in the statement issued in Nairobi yesterday. It held 1.54 per cent ownership.

The value of the deal was not disclosed. The company, which announced a 22 per cent increase in after-tax profit for the full-year ended March 2014, intends to make the acquisition through a non-holding company to conform to Central Bank of Kenya rules.

REGULATOR'S GUIDELINES

The banking regulator’s guidelines stipulate that non-bank institutions can only acquire 25 per cent of a lender’s paid-up share capital through a non-operating holding company.

K-Rep Group, the founder shareholders of the bank, is also set to increase its stake to 22 per cent. “We are delighted that Centum has increased its shareholding in our bank, which will enable it to grow stronger,” K-Rep Group chairman Kabiru Kinyanjui said.

This means that the other strategic investors, International Finance Corporation, African Development Bank, Netherlands Development Bank, Triodos Bank and Shorebank Corporation, are on their way out with the ones left holding a minority stake of less than 10 per cent.

The SME-oriented small-tier bank’s net profit rose to Sh360 million in 2013, up from Sh196 million a year earlier, representing an 84 per cent jump in growth.

The billionaire Chris Kirubi-majority owned company, is also in the race to acquire listed agricultural firm Rea Vipingo, having placed a bid of Sh4.5 billion for the sisal producer.