The World Bank’s private-sector lending arm, International Finance Corporation (IFC), will this month conclude the purchase of a 6.7 per cent stake in Equity Bank valued at Sh13.9 billion.
The purchase of the stake from Britam Holdings will make IFC the second largest shareholder in Equity Bank after Arise B.V, which holds a 12.67 per cent stake.
“The longstop date for the proposed transaction has been set for April 29,” Britam said.
Arise B.V, an African financial investments company, is majority-owned by Norwegian investment fund Norfund, which owns a 48 per cent stake, while Dutch development bank FMO and Dutch cooperative bank Rabobank hold a 27 per cent and 25 per cent stake in the company respectively.
“The proposed transaction, being a secondary market transaction between two investors, is not expected to impact the operation or finances of Equity Group Holdings (EGH). It is, however, expected that the proposed transaction will bring on board strategic investors who will help to improve the sustainability of EGH,” said Britam.
The deal is expected to see the Nairobi Securities Exchange-listed Britam book significant gains, lifting its earnings in the half-year ending June.
The transaction will also mark Britam’s exit from the bank, which has been one of its most successful investments in decades.
The sale that was inked in December last year will see Britam transfer 253 million shares valued at Sh55 each to the global development financier, which is set to give the billionaires a significant windfall.
Before the agreement to sell the remaining shares to the global financier, Britam had been cutting its stake in Equity by selling shares in the open market.
Britam said the sale will help Equity net a well-resourced investor who is critical in its growth strategy.
“The proposed transaction will contribute to EGH’s mission of offering integrated financial services that socially and economically empower customers, businesses, enterprises and communities.
By bringing on board IFC, a strategic investor and the largest global development institution focused exclusively on the private sector in developing countries as a shareholder, EGH will strengthen its position in the market as a provider of inclusive financial services, the insurance firm further said.
The deal will also significantly boost Equity’s drive for regional expansion after completing the acquisition of Banque Commercial du Congo (BCDC) in 2020.
Top businessmen including Equity Group chief executive James Mwangi, Jimnah Mbaru, Peter Wairegi, and Peter Munga have stakes in Britam. Mr Mbaru, a seasoned investment banker, leads the pack with a 7.72 per cent stake in Britam, Mr Wairegi (4.03 per cent) while Mr Mwangi and Mr Munga both own a 2.97 percent stake in the insurance firm.