Sidian Bank Ownership: A Danish private equity fund has signed a Sh. 1.2 billion shares deal with a local bank that is associated with billionaire Chris Kirubi. The Investment Fund for Developing Countries (IFU) signed a deal with Sidian Bank which is a subsidiary of Centum Investments.
Mr. Kirubi is the largest individual shareholder of Centum Investments. According to the Business Daily, the Danish fund, which is also a shareholder in the 310-megawatts Lake Turkana Wind Power firm, could become Sidian’s second-highest shareholder if it converts the entire investment into equity.
Centum Investment Company is the bank’s majority shareholder. “This means IFU will dilute current shareholders including K-Rep Group Limited which is currently the second-highest shareholder in Sidian after Centum, which holds a 72.93 percent stake. K-Rep had a 17.05 percent stake as per the December 2017 annual report,” the Business Daily reports.
Following the deal, the equity fund will now get seats on the board of Sidian Bank.
“As part of the financing agreement, IFU will have the option within the first three years, to convert the outstanding principal loan into equity which will translate to shareholding of approximately 20 percent of the bank,” said Sidian Bank board chairman and Centum CEO James Mworia.
Currently, the bank is looking to become a tier II bank by the year 2022.
Sidian Bank had posted a loss of Sh. 164.92 million by end of September 2018 and breached total capital to total risk weighted assets ratio by 0.5 percentage points. Its total assets were Sh. 25 billion.
“IFU made its first investment in Kenya in 1970 and has also invested 68.4 DKKm (million Danish Krone) – an equivalent of Sh1.04 billion- in Lake Turkana Wind Power Project (LTWP). IFU has 10 other active investments in the country including in LTWP, Rabai Power Plant, Radisson Blu Hotel, COOP Kenya, Insta Products and Afriscan Kenya. Total disbursement is 347.6 DKKm (Sh. 5.4 billion), being IFU’s largest portfolio in Africa,” says the Business Daily.