×

Britam bond records 147pc oversubscription

Britam Chairman Jimnah Mbaru (left), Group Managing Director Benson Wairegi (centre) and director James Mwangi arrive at the firm’s Annual General Meeting in Nairobi. [PHOTO JOHN MUCHUCHA/STANDARD]

The financial services group received bids totaling Sh7.4 billion against a target of Sh3 billion

British American Investments Company (Britam)'s Sh3 billion bond has been oversubscribed by 147 per cent. The diversified financial services group received bids totalling Sh7.4 billion against a target of Sh3 billion. The insurer said it retained Sh6 billion of the funds due to a green shoe option of Sh3 billion and dismissed plans of going to the market for the second tranche.

Group Managing Director Benson Wairegi said the massive participation in the corporate bond is a validation of the confidence the market has in the company."The funds will give us the additional impetus needed to take our Group to the next level of growth in line with our strategic plan," he said in a statement yesterday.

Initial plans

Britam was seeking to raise a total of Sh6 billion from the debt market through two tranches but Dr Wairegi said the oversubscription now quashes the initial plans of a second tranche. The second tranche of the corporate bond issue would have raised the balance accruing from the first tranche.

Wairegi said the funds would be used to fund the company's local and regional expansion programme, ICT development, accelerate property development and bolster Britam's investment in private equity.

Some of the property market segments earmarked include masterplanned communities, suburban outlet malls, commercial office parks, budget hotels and mixed-use properties - retail, offices and residential properties."We see growing demand for decent and inspirational properties which is consistent with the expanding middle class and SME population," said Wairegi

"We aim to expand our property agenda to all markets we are operating in and currently we are focusing on expanding our land mark to make sure this venture is a success."

Britam is set to buy the entire Equity Bank's 24.75 per cent (57.27 million shares) stake in Housing Finance, subject to regulatory approvals. The offer is valued at Sh41.48 per share translating to a massive Sh2.37 billion.

The Britam bond will be listed on the Nairobi Securities Exchange (NSE)'s Fixed Income Securities Market Segment on July 30. "The transaction saw great participation from leading fund managers contributing 50.9 per cent, Bank and insurance companies jointly at 41 per cent and retail investors at 8.1 per cent of the total raised," said Paul Orem, lead arranger and Chief Executive of Dyer& Blair Investment Bank.

Britam has already launched a county strategy that will see the establishment of its presence in the 47 counties.