2578CK Ram KCB Infomation Memorandum Insides.Indd
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KCB Rights Issue July - 2010 Information Memorandum _____________________________________________________________________________ KENYA COMMERCIAL BANK (Registration Number C.9/88.) _____________________________________________________________________________ INFORMATION MEMORANDUM _____________________________________________________________________________ RIGHTS ISSUE OF 887,111,110 NEW ORDINARY SHARES AT AN OFFER PRICE OF K.SHS. 17/- IN THE RATIO OF TWO (2) NEW ORDINARY SHARES FOR EVERY FIVE (5) ORDINARY SHARES HELD ___________________________________________________________________________ Kenya Commercial Bank Limited (“KCB” or the “Bank” or the “Group or the “Company” or “Issuer”) KCB was incorporated on 12th November 1970 pursuant to the Companies Act Chapter 486 of the Laws of Kenya and is registered under Registration Number C.9/88. INFORMATION MEMORANDUM IN RESPECT OF RIGHTS ISSUE OF 887,111,110 NEW ORDINARY SHARES AT AN OFFER PRICE OF KENYA SHILLINGS 17/- IN THE RATIO OF TWO (2) NEW ORDINARY SHARES FOR EVERY FIVE (5) ORDINARY SHARES HELD The date of this Information Memorandum is 2 June 2010 This report contains 116 pages Appendices comprise 5 pages The offer opens on 1 July 2010 and closes on 23 July 2010 1 KCB Rights Issue July - 2010 Information Memorandum Joint Lead Transaction Advisors KPMG Kenya & Standard Investment Bank Limited Lead Sponsoring Stockbroker Standard Investment Bank Limited Reporting Accountants Ernst & Young Legal Advisors Oraro & Company Advocates Public Relations Gina Din Corporate Communications Advertising Agent Nuturn Limited Media Agency Media Initiative of East Africa 2 KCB Rights Issue July - 2010 Information Memorandum VISION To be the prefered Financial Solutions provider in Africa with Global Reach. MISSION To consistently deliver quality fi nancial products and services in the interest of all our stakeholders, through best business practice in the dynamic markets in which we operate. 3 KCB Rights Issue July - 2010 Information Memorandum Contents 1 Introduction ............................................................................................................................................................ 7 2 Chairman’s statement ............................................................................................................................................. 9 3 Corporate information ......................................................................................................................................... 10 Advisors and other parties ........................................................................................................................................... 11 Defi nitions .................................................................................................................................................................... 12 6 Key features of the Rights Issue ........................................................................................................................... 14 6.1 Rights Issue Statistics ................................................................................................................................... 14 6.2 Reasons for the Rights Issue ..................................................................................................................... 14 6.3 Timetable of Principal Events .................................................................................................................. 15 6.4 Minimum Success ..................................................................................................................................... 15 6.5 Underwriting ............................................................................................................................................ 15 6.6 Basis of Subscription Price ....................................................................................................................... 15 6.7 Pertinent Financial Data ........................................................................................................................... 17 6.8 Acceptance and Application Procedures .................................................................................................. 17 6.9 Offer .......................................................................................................................................................... 17 6.10 Status of the New Shares .......................................................................................................................... 17 6.11 Opening and Closing Date of the Rights Issue ........................................................................................ 18 6.12 Entitlement ............................................................................................................................................... 18 6.13 Effect of not having a CDS Account ........................................................................................................ 18 6.14 Acceptance Procedure .............................................................................................................................. 19 6.15 Application for Additional Shares and Allocation Policy ......................................................................... 20 6.16 Renunciation of Rights ............................................................................................................................. 21 6.17 Restriction on Renunciation of Rights ..................................................................................................... 22 6.18 Application Money ................................................................................................................................... 22 6.19 Refunds ..................................................................................................................................................... 23 6.20 New Shares ............................................................................................................................................... 23 6.21 Untaken Rights and Allocation Policy ...................................................................................................... 23 6.22 Loan Facilities ........................................................................................................................................... 24 6.23 Foreign Investors ....................................................................................................................................... 24 6.24 Regulatory Restrictions ............................................................................................................................. 25 6.25 Tax Implications ....................................................................................................................................... 25 6.26 Expenses of the Rights Offer .................................................................................................................... 26 6.27 Governing Law ......................................................................................................................................... 26 7 Economic overview ............................................................................................................................................... 27 7.1 Kenya ........................................................................................................................................................ 27 7.2 Uganda ..................................................................................................................................................... 28 7.3 Tanzania ................................................................................................................................................... 28 7.4 Rwanda ..................................................................................................................................................... 29 7.5 South Sudan ............................................................................................................................................. 30 8 Overview of the banking sector in the region ...................................................................................................... 31 8.1 Kenya ........................................................................................................................................................ 31 8.2 Uganda ..................................................................................................................................................... 35 8.3 Rwanda ..................................................................................................................................................... 37 8.4 Tanzania ................................................................................................................................................... 38 8.5 Sudan ........................................................................................................................................................ 38 9 Information on Kenya Commercial Bank Limited and its subsidiaries ............................................................... 40 9.1 History of the KCB Group ....................................................................................................................... 40 9.2 Shareholding structure .............................................................................................................................