Rwanda Capital Market Authority (CMA) and Rwanda Stoke Exchange have granted the Bank Of Kigali Group PLC rights issue to raise additional capital from its existing shareholders by giving them chance to buy more shares.
“BK GROUP PLC is pleased to announce that CMA Rwanda and RSE Rwanda have approved the rights issue to the existing shareholders of BK,” BK announced on Thursday.
According to their announcement, the bank is offering a total of 222,222,222 new shares at Rwf270 per ordinary share to “raise approximately Rwf60 billion before expenses in new equity capital.”
“BK shareholders will have the right to subscribe for one new ordinary share for every three ordinary shares held on Wednesday, October 24, 2018 which is the record date.”
Usually, a subscription right” or a “pre-emptive right” as it is referred to in financial terms – is a privilege granted by a company to its shareholders to buy new shares in proportion to their preexisting shares.
Given that the BK market is growing, in the last general assembly BK shareholders urged the bank to increase its capital by allowing them to buy additional shares.
“It’s now officially approved, our shareholders can now start applying for additional shares,” Thierry Nshuti, BK Group Marketing Manager told KT Press on Thursday.
“We have a big demand and we think that keeping on borrowing money from foreign banks to give loans to our clients was not a good idea because foreign currencies are expensive,” Nshuti also said adding that BK preferred using local money from its clients to keep the momentum in terms of profits “since using foreign currencies causes a decline in our profits.”
Nshuti said that there is no limitation for shares a client can apply for but the bank will have time to evaluate all the demands to make sure that everybody is fairly catered for.
According to CMA Public Relations Officer, Magnifique Migisha, offering rights issues to a company is an opportunity for it to raise funds for expanding its business and savings.
“For CMA, it increases our confidence when commercial institutions, shareholders and investors have trust in our market,” he said.
While the record date is scheduled on October 24th rights issue will open on October 29th and the last date for trading unsold rights is on November 5th.
BK also set the rights issue closing date to November 9th while announcement of final results is scheduled on November 23rd.
The listing of the new shares on the Rwanda Stoke Exchange (RSE) and the cross listing on the NSE and commencement of trading on both markets will take place on November 30th.