The National Bank of Kenya (NBK) will seek to restate its share capital to Ksh13 billion once the proposed takeover of the lender by Kenya Commercial Bank (KCB) goes through.
According to a notice of annual general meeting sent to its shareholders, NBK placed the matter of raising the share capital as special business to be discussed during the AGM that is scheduled for June 14.
The changes, if passed, are set to take effect “upon completion of the proposed takeover of the company by KCB Group” or in the case of “any competing takeover offer (if any).”
In order to gain the share capital of Ksh13 billion, the NBK Board will ask shareholders to convert 1.2 billion non-cumulative preference shares of the firm into ordinary shares of Ksh5 each.
“… upon this resolution becoming effective, the rights attaching to non-cumulative preference shares shall automatically be extinguished,” read the NBK notice.
At the same time, NBK’s board wants similar non-cumulative preference shares held by the Treasury ministry as well as those by the National Social Security Fund (NSSF) also be converted into ordinary shares of Ksh5 each.
Treasury holds 900 million non-cumulative preference shares in NBK, while NSSF’s is at 235 million, according to the lender.
If the resolutions are passed, the total number of ordinary shares of NBK will amount to 2.6 billion. At Ksh5 each, the total share capital will change to Ksh13billion.
The mid-June AGM will be held at the indoor arena of the Moi International Sports Centre in Kasarani.
It will serve as part of the wheels in motion in the process of takeover of NBK by KCB Group that became apparent in mid-April.
Shareholders of KCB are set to discuss the matter at an AGM on May 30.
The deal has already received approval from the Capital Markets Authority (CMA), and awaits the greenlight from the Competition Authority of Kenya (CAK).
The deal, according to a prospective KCB calendar, is expected to be completed by October, with NBK set to be a subsidiary allowing for two years of realignment between the two banks.