Credit Bank has lined up a series of resolutions for endorsement by shareholders at the Annual General Meeting (AGM) slated for June 27 at the Catholic University of Eastern Africa, including a proposed rights issue aimed at generating an extra Ksh 2 billion for the lender.
A notice announcing the meeting reads in part: “That in accordance with Section 329 of the Companies Act, 2015 the directors be authorised and directed to offer a maximum of 14,438,550 new ordinary shares in the capital of the company at an offer price of Kshs 140/- per share to shareholders in the Company’s record as at 31st December 2018 by way of a rights issue of 3 (three) new share for every 5 (five) ordinary shares held…”
Credit Bank has been on an expansion spree in recent years, which has seen its branch network increase from four to 17 in the last one decade. It is believed that the generated revenue will, among others, go into supporting this expansion.
During the AGM, shareholders will also be asked to approve the increase of the bank’s nominal share capital from Ksh 5 billion to Ksh 7.5 billion.
“THAT the Nominal Share Capital of the Company be increased from Shs 5,000,000,000 divided into 50,000,000 ordinary shares of Shs 100 each to Shs 7,500,000,000 divided into 75,000,000 ordinary shares of Shs 100 each by the creation of an additional 25,000,000 new ordinary shares of Shs 100 each, such new shares to rank pari passu in all respects with the existing ordinary shares in the capital of the Company,” reads the proposed resolution.
Also lined up for discussion and approval is a proposal to spend Ksh 200.5 million to implement a bonus issue that will see the volume of ordinary stock rise by two million units to 52 million shares. The money is part of the sum standing to the credit of the retained profit account as at 31 December 2018.
In 2017, Credit Bank also undertook another cash call which saw it capitalise reserves of about Ksh 389.8 million by issuing 3,898,326 ordinary shares of Sh100 par value.
During the AGM, three retiring directors, Simeon Nyachae, Ketan Devram Morjaria and James Stanley Mathenge will offer themselves for re-election.
Nyachae, who is the bank’s chairman, owns a 14.96% stake in the lender through his Sansora Group. Morjaria owns 9.88%.