HF Group Plc has announced the successful conclusion of its rights issue, achieving a subscription rate of 138.32%. The initiative, which aimed to raise KES 4.6 billion, garnered applications totaling KES 6.38 billion, reflecting strong investor confidence in the company’s strategic direction.
Group CEO Robert Kibaara expressed his satisfaction with the outcome, stating, “The outcome of the Rights Issue has been an overwhelming success. We went to our shareholders asking for an additional investment of Kes 4.6Billion, upon conclusion of the process, we have received applications of Kes 6.38Billion. We are now firmly on the path to powering our next phase of business growth.” Said Robert Kibaara, the Group’s CEO.
The Rights Issue was priced at KES 4.00 per share, offering shareholders two new ordinary shares for every existing share held, with the option to apply for additional shares. To accommodate the oversubscription, the company had included a green shoe option of up to 30%, equivalent to 384,614,168 shares. In total, applications were received for 1,595,995,966 new shares, amounting to KES 6,383,983,864.
The capital raised is integral to HF Group’s five-year strategy to transition into a full-service banking institution and a diversified financial entity. The funds are earmarked for expanding the company’s product offerings, enhancing technology platforms, and driving future growth. Specifically, 85% of the funds will be directed towards business expansion, while 15% will be allocated to technology and digitization efforts to improve efficiency and customer experience.
Chairperson Prof. Olive Mugenda highlighted the strong support from key shareholders, including Britam and the National Social Security Fund (NSSF), noting, “This is a great show of confidence by our shareholders. Our key shareholders, including Britam and NSSF, as well as retail investors, demonstrated immense confidence in the Group by taking up their rights. We now have a solid foundation to unlock value for shareholders.”
HF Group intends to channel the funds raised through the rights issue into strategic initiatives aimed at bolstering its market position and enhancing operational efficiency. A significant portion will support the expansion of its retail and corporate banking products to better serve customers.
Approximately 15% of the capital will go toward digitization and strengthening the company’s technology infrastructure, optimizing operations and improving customer experience. Additionally, the funds will enable HF Group to scale key business segments such as mortgage lending, bancassurance, and property development, while ensuring compliance with regulatory requirements mandating a minimum capital base of KES 10 billion by 2028.
The new shares are scheduled to be credited to shareholders’ Central Depository and Settlement (CDS) accounts on December 23, 2024, with trading set to commence on the Nairobi Securities Exchange (NSE) on December 24, 2024.
This achievement marks HF Group’s third consecutive year of profitability, signaling a robust turnaround and a positive outlook for its future endeavors.
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