Top Bank Issues IPO

The Citizen (Dar es Salaam)

23 June 2011

Nairobi — The Bank of Kigali, majority-owned by the Rwanda government, is to issue an initial public offering (IPO) for 45 per cent of the current share-holding. The IPO is expected to commence sales next Thursday and will be open to foreign investors.

Although details of the transaction are expected in the next few days, brokerage firms said they expect that East Africans would be regarded as locals in the IPO as was the case with the Bralirwa IPO which was concluded early this year.

“Bank of Kigali Limited has received approval from the Capital Markets Advisory Council and the Rwanda Stock Exchange to offer to the public in an initial public offering 45 per cent of its shares and to list its entire issued capital on the Rwanda Stock Exchange,” the bank said in message to potential clients.

The bank is doing the book-building process as a way to determine the price to be offered to foreign investors. The deadline for those interested in applying is set for today.

“We would like to invite interested international investors to participate in the book building process,” the bank said. Prices for foreigners in a book-building process tend to be higher than those offered to locals as was the case in Kenya for the Safaricom IPO where foreigners paid 50 cents more.

“We expect that other east Africans will be considered on the same levels as locals as was the case for the Bralirwa IPO,” said Mr John Kamunya, head of research at Dyer and Blair Investment Bank, which has operations in Rwanda. Kenya has also been considering East Africans as locals for IPOs issued since the Safaricom offer in 2008.

Despite the offer for 45 per cent, the entire share capital of the bank will be listed on the Rwanda Stock Exchange (RSE). The government will offload 25 per cent of its shareholding while another 20 per cent new shares will be created and listed.However, the government will continue to be the bank’s largest shareholder with a 30 per cent stake.

Bank of Kigali is the largest bank in Rwanda with about 26, 27 and 32 per cent marketshare for deposits, total assets and loans, respectively. The IPO is the second such offer in the country after brewing firm Bralirwa listed their shares following an IPO early this year.

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