British-American IPO raises Ksh3.5 billion

British-American IPO raises Ksh3.5 billion 

Nairobi, August 23rd, 2011- The IPO of the British-American Group has raised Ksh3.5 billion amid a slump in both local and global markets, the Group Chairman Nicholas Ashford- Hodges has said.

“We have surpassed the minimum success threshold of 50% set out in the prospectus and also  met the minimum shareholder’s requirement of 1,000 to list on the Main Investment Market Segment of the Nairobi Stock Exchange.  In addition, we have met the minimum shareholding requirement that at least 25% of the shares in the company be held by not less than 1,000 shareholders and that at least 40% of the Offer Shares are allotted to local investors” said Ashford- Hodges.  

The Chairman went on to say: “The shares reserved for retail investors and for employees, agents, and policyholders both recorded oversubscription; however, international and institutional investors did not take up their allocations fully. The high take-up by retail investors shows the strength of the British-American brand amongst East African investors. We now have over 28,000 shareholders and are very grateful for the support our local investors have given us”.

“The positive market reception clearly demonstrates local investor confidence in the Group’s long-term value proposition. We are also happy that several institutional and international investors also responded, though not to the levels we expected,” he added.

The offer which opened on July 12^th and closed on August 5^th sought to raise Ksh5.85 billion by floating 650,000,000 new ordinary shares at an offer price of Ksh9 (nine) per share. 

“A 60 percent subscription is a commendable outcome in the light of what is currently happening in the financial markets. It was unfortunate that the US debt crisis escalated right in the middle of the offer period, causing loss of appetite amongst institutional investors especially those outside Kenya. Even though the offer has not been fully subscribed, we have surpassed the minimum success threshold of 50% set in the prospectus” said Ashford- Hodges.

Commenting on the outcome, Group Managing Director Benson Wairegi said “the level of subscription will still enable us to meet the strategies of the Group”.

“We are very bullish about our prospects. Our strategy is on course and the Board of Directors will now have to prioritise on some of our projects and the timing for their implementation. The IPO has given us the opportunity to increase the scope of our operations and widen our footprint across the East African region. Locally, we now have the resources to tap the economic potential nascent in the newly created counties as earlier planned. Our balance sheet is even stronger and we should not have any problems financing the high value projects we had envisaged,” said Mr Wairegi. 

“Through this  listing, British-American, has reached a significant milestone in its long history in Kenya” he concluded.     

IPO Results by Numbers

Pool	No. of Applications	Total Shares Applied	Amount Applied Ksh
Employees, Agents & Individual Life Policy Holders	2,101	20,150,000	181,350,000
East African Retail Investors	25,588	276,843,100	2,491,587,900
Qualified Institutional Investors	72	92,572,000	833,148,000
Foreign Investors	23	1,001,900	9,017,100
Total	28,054	390,567,000	3,515,103,000

 
The local Retail investors pool was over oversubscribed by Ksh.736,587,900 while Staff, Agents, Policy holders category was oversubscribed by Ksh. 5,850,000