HF Group has received regulatory approval from the Capital Markets Authority (CMA) to raise Ksh.6 billion through a Rights Issue.
The approved Rights Issue will offer up to 1,499,995,255 new ordinary shares at a price of Ksh. 4.00 per share. Shareholders will receive two new shares for every existing share held, with the option to apply for additional shares.
To accommodate potential oversubscription, a green shoe option of up to 30% (approximately 384,614,168 shares) has been approved. The new shares will be listed on the Nairobi Securities Exchange.
Strategic Use of Funds
The raised capital will be used to: expand product offerings; strengthen technology platforms, and position the Group for future growth.
HF Group has achieved three consecutive years of profitability.
“This capital investment is a significant milestone in HF Group’s transformation journey, reaffirming our commitment to long-term value creation for our stakeholders,” said Robert Kibaara, CEO of HF Group.
“Our consistent growth over the past two and a half years demonstrates the strength and resilience of our business. With this additional capital, we are well-positioned to accelerate future growth.”
Shareholder Support
Britam Group, a major shareholder, has confirmed its intention to participate fully in the Rights Issue. Other principal shareholders have also expressed support for the transaction.
Important Dates
- Record Date: Friday, November 1, 2024, at 3 PM
- Offer Period: Tuesday, November 12, 2024, to Monday, December 9, 2024, at 5 PM
The Board of Directors approved the Rights Issue on August 12, 2024, and shareholders subsequently ratified the decision at a General Meeting on September 4, 2024.
“Before the rights issue, HF Group’s capital adequacy ratios were significantly below the statutory requirements set by the Central Bank of Kenya in H1’2024, with both Core Capital to Total Liabilities and Core Capital to Total Risk-Weighted Assets ratios in deficit. Post-rights issue, HF Group’s capital adequacy position will improve significantly, and will be above the statutory minimums,” Cytonn Investments says in a commentary.
| HF Group’s Capital Adequacy Ratios | Before the rights issue | After the rights issue | Change |
| Core Capital/Total Liabilities | 4.0% | 14.2% | 10.2% |
| Minimum Statutory ratio | 8.0% | 8.0% | 0.0% |
| Excess | (4.0%) | 6.2% | 10.2% |
| Core Capital/Total Risk Weighted Assets | 4.6% | 16.5% | 11.9% |
| Minimum Statutory ratio | 10.5% | 10.5% | 0.0% |
| Excess | (5.9%) | 6.0% | 11.9% |
