HF Group Plc Celebrates Impressive Rights Issue Oversubscription: What This Means for the Future
In a remarkable show of shareholder confidence, HF Group Plc, a prominent local financial solutions provider, has announced an outstanding oversubscription in its recently concluded Rights Issue, achieving a remarkable 138.32% subscription performance rate. This milestone comes as a stepping stone in the Group’s ambitious journey towards transforming into a fully-fledged banking institution.
A Message of Success and Growth
Robert Kibaara, the Group CEO, expressed his enthusiasm over the extraordinarily positive response from shareholders. He stated, “The outcome of the Rights Issue has been an overwhelming success. We aimed to raise Kes 4.6 billion and ended up securing applications for Kes 6.38 billion. We are now firmly on the path to powering our next phase of business growth.” This influx of capital is not only significant for HF Group but also paints a promising picture for the financial services sector in Kenya as a whole.
This capital raise is a crucial element of HF Group’s five-year strategy, which focuses on diversification and technological enhancement. With a strong intention to evolve into a comprehensive financial services provider, the raised funds will facilitate the expansion of product offerings, bolster technology platforms, and position the Group favorably for future market dynamics. Notably, HF Group has proudly recorded three consecutive years of profitability, underscoring its stable foundation.
Understanding the Rights Issue Structure
The Rights Issue, priced at Kes 4.00 per share, offered shareholders an attractive opportunity, allowing them to acquire two new ordinary shares for every existing one held. Additionally, the plan included a green shoe option to accommodate any further oversubscription, reflecting the company’s strategy to optimize shareholder participation. The grand total of new shares applied for reached a staggering 1.6 billion, contributing a gross value of Kes 6.38 billion to the company.
Prof. Olive Mugenda, the Chairperson of HF Group, further applauded the enthusiasm displayed by shareholders, emphasizing the strong backing from key stakeholders such as Britam and NSSF. “This is a great show of confidence by our shareholders. We have now set up a foundation for growth and we look forward to unlocking value for our shareholders in the short term,” she remarked. The allocation of raised funds will see 85% directed towards expanding business operations, with the remaining 15% invested in technology and digitization efforts aimed at enhancing efficiency and customer experience.
Looking Ahead: Compliance and Growth
With this successful capital raise, HF Group is strategically positioned not only to meet the upcoming regulations requiring banks to elevate their capital base to 10 billion by 2028 but also to set off on an accelerated growth trajectory. The shares are set to be uploaded to shareholders’ Central Depository System (CDS) accounts on Monday, December 23, with trading expected to commence on the Nairobi Securities Exchange the following day.
This successful Rights Issue is more than just a financial transaction; it illustrates the robust confidence that investors have in HF Group’s strategic vision and growth potential. For stakeholders in the financial sector, this development marks a positive trend, signaling increased investor engagement and optimism in Kenya’s banking landscape.
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