Listed financial solutions provider HF Group Plc (NSE: HFCK) on Tuesday held a Bell Ringing Ceremony as a culmination of its recently concluded Rights Issue which was oversubscribed by 38.32%.
Senior representatives from the Group, the Nairobi Securities Exchange, Capital Markets Authority, and other key stakeholders attended the ceremony at the NSE. The issuance was met with exceptional demand; the Group had targeted to raise an additional investment of Kes 4.6Billion but received applications of Kes 6.38Billion.
Robert Kibaara, the Group’s CEO stated: “This significant capital raise is a cornerstone of HF Group’s five-year strategy. 85 percent of these funds will be invested in scaling up the business that we have created and which is already profitable. 15 percent of the funds will be invested in technology and digitization of the business to enhance efficiency and customer experience.”
The Rights Issue, priced at Kes 4.00 per share, was structured to offer shareholders two (2) new ordinary shares for every one (1) existing ordinary share held, with the shareholders having the option to apply for additional shares.
It had a green shoe option of up to 30% (equivalent to 384,614,168 shares) to accommodate any potential oversubscription. The Grand Total Number of New Shares applied for under the Rights Issue (Entitlement Shares + Additional Shares) was 1,595,995,966 with a total gross value of Kes 6,383,983,864.
Frank Mwiti, CEO of the Nairobi Securities Exchange (NSE), stated: “HF Group’s decision to pursue a rights issue stands out as a bold and strategic move, underscoring its confidence in the NSE and the robustness of Kenya’s capital markets. I applaud the Group for this bold decision that also reflects a forward-looking approach to strengthening its financial position and serves as a powerful endorsement of the Nairobi Securities Exchange (NSE) as a reliable platform for raising capital in a challenging economic environment.”
With this successful capital injection, the Group’s banking subsidiary, HFC, which now sits at Kes 8billion of capital, is well ahead of the implementation timetable of the recently announced regulatory requirements on capital adequacy. The bank is also on course to fully comply with the regulatory target that will see banks expected to grow their capital base to 10 Billion by 2028,” Robert Kibaara said.
HF Group shares are currently trading at an average share price of Kes 9 (over 100% appreciation from the rights price of Kes 4), which is indicative of the potential of the counter to deliver returns to investors.