Diamond Trust seeks Sh3 billion in rights issue

Diamond Trust Bank Kenya Monday launched its fourth rights issue through which it seeks to raise more than Sh3 billion from shareholders to fund its growth strategy.

The lender received regulatory approval last week to issue up to 22,010,009 shares with a par value of Sh4 each at a ratio of one ordinary share for every 10 held.

Managing director Nasim Devji expressed confidence that the issue will be strongly supported by the bank’s shareholders during the launch.

“The board resolved to offer the rights at an attractive discount over the prevailing market price to reward our shareholders loyalty,” said Mrs Devji in Nairobi.

The cash call will see shares sold at a discount at a time when the lender’s stock is trading at a one year high, having gained 27 per cent over the past six months from Sh192 to Sh244.

Mid-tier bank
The period of acceptance of the rights issue will close on July 25 with the mid-tier bank expecting to use the additional capital to fund future asset growth and invest in branch network expansion.

\Mrs Devji said the cash would enable the bank to explore future investment opportunities in new markets in the region as well as in alternative channels.

All owners in the bank’s share register as at close of business June 24 will be entitled to participate in the rights issue.

Others interested in acquiring a piece of the institution may bid for the rights during the trading window which is expected to run from tomorrow to July 15.

Between 2006 and 2012, DTB Kenya undertook three sets of rights issues — all of which were over-subscribed — raising additional capital of Sh4.1 billion in the aggregate from the market.

DTB is an affiliate of the Aga Khan Fund for Economic Development (AKFED), the economic development arm of the Aga Khan Development Network.