HF Group gets CMA nod to raise to Sh6 billion via rights issue

Listed firm HF Group has received regulatory approval from the Capital Markets Authority (CMA) to raise Sh6 billion through a rights issue.

Chief executive Robert Kibaara said the capital raise is a cornerstone of the firm’s five-year strategy, aimed at evolving into a full-service banking institution and a fully diversified financial entity.

The approved rights issue will offer up to 1.499 billion new ordinary shares for Sh4 per share. “This capital investment marks a pivotal milestone in HF Group’s ongoing transformation journey and reinforces our dedication to delivering long-term value to our stakeholders,” said Mr Kibaara in a statement.

The rights issue is structured to offer shareholders two new ordinary.

shares for every one existing ordinary share held, with the shareholders having the option to apply for additional shares.

In addition, a green shoe option of up to 30 per cent (equivalent to 384,614,168 shares) has been approved to accommodate any potential oversubscription.
The new ordinary shares will be listed on the Nairobi Securities Exchange.

HF Group Chairperson Prof Olive Mugenda said the rights issue presents shareholders with an opportunity to exercise their rights and contribute to the Group’s promising future.

“As the group embarks on this transformative journey, we remain committed to innovation, excellence and delivering exceptional value to all our stakeholders.”

Britam Group, HF Group’s major shareholder, has confirmed that it will be taking up its full rights. Other principal shareholders are also supportive of the transaction.

“Over the past two and a half years, we have demonstrated the strength and resilience of our business by registering year-on-year growth in profitability. I am confident that with the capital injection, we will be well positioned to accelerate further growth into the future,” Kibaara said.

Shareholders must be on the register by November 1, 2024, to participate in the rights issue. The Offer will open on November 12th, 2024, and close on Monday, December 9th, 2024.

Last August, the HF Group board passed the resolution to offer up to about 1.5 billion new ordinary shares (inclusive of a 30 per cent green shoe option) via Rights Issue.