Centum gets nod to buy controlling stake in K-Rep
Centum has received the go-ahead from the Competition Authority of Kenya to acquire a controlling stake in K-Rep Bank.
The buyout, expected to cost about Sh2.5 billion, is meant to expand Centum’s footprint in Kenya’s financial services sector, with a 65.9 per cent stake in the bank.
The investment firm currently holds 1.64 per cent in K-Rep Bank, whose core market is the microfinance, small and medium enterprises and clients at the bottom of the pyramid.
Centum first announced its plan to purchase the additional shares from several existing shareholders on July 31. Since 2004, Centum has been a minority shareholder in the bank but intends to execute the acquisition through a non-operating holding company.
The firm is also awaiting approval from the Central Bank to proceed with the buyout.
K-Rep was licensed to offer commercial bank services in 1999.
By March, it had assets worth Sh13.9 billion. In the 2013 financial year, the bank reported profit after tax of Sh360 million, an 83.7 per cent jump from Sh196 million the previous year.
The current shareholders in K-Rep include K-Rep Group (25 per cent), International Finance Corporation (16.7 per cent), African Development Bank (15.1 per cent), Triodos Bank (11 per cent), staff under the employee share ownership plan (10 per cent), Netherlands Development Finance (5 per cent), founding members (5.2 per cent) and government agency, Industrial and Commercial Development Corporation (3.8 per cent). Source: The Nation