adminfund-raising initiatives, subject to shareholders’ approval at the Extraordinary General Meeting slated for next month.
Group company secretary Mr Daniel Makono, in a notice to shareholders, said US$15 million would be raised through the issue of 493 421 053 ordinary shares.
As a special resolution directors are also seeking to raise an additional US$10 million through issuing 6 640 106 redeemable convertible preference shares at US$1,50 per share.
ALSO SEE…
Kingdom is also seeking shareholders’ approval to relist on the bourse, and will only be able to raise the additional US$10 million through redeemable convertible preference shares after listing. Redeemable convertible preferential shares are interest-bearing investments that can be converted at the discretion of the shareholder. Usually, the share cannot be converted until a certain date after issuance, often five years or longer, and only at a specified price.
According to the recapitalisation model, US$4,5 million would be raised through a rights issue, US$7,5 million through a private placement and US$3 million through a public offering.
A rights issue is an issue of additional shares by a company to raise capital under a seasoned equity offering while a private placement is a funding round of securities which are sold without an initial public offering, usually to a small number of chosen private investors.
A public offering is a sale of equity shares or other financial instruments by an organisation to the public in order to raise funds for business expansion and investment.
Mr Makono said the diversified financial house is also seeking to make its presence on the Johannesburg Stock Exchange and or Stock Exchange of Mauritius, subject to obtaining the necessary regulatory approvals.
The other three fund-raising options can be carried out before listing on the stock exchange. However, the public offering, which are shares issued to the public, can be done before or on listing.
Kingdom was last week said to have identified a joint venture partner in its quest to meet the central bank’s minimum capital requirement of US$12,5 million.
This means that the new partner will bring in about US$7,5 million through a private placement initiative that shareholders have to approve at the EGM.
Indications are that the partners are from the region and that is why Kingdom is also seeking shareholder approval as an ordinary resolution to enter into negotiations to acquire Kingdom Bank Africa Limited-issued shares and Amara Tech.
The idea is to increase its stake in the Botswana financial house and increase its regional presence.
“The directors of the company are hereby authorised to enter into negotiations with the holders of ordinary shares in KBAL and Amara Tech and acquire the issued shares,” said Mr Makono in the statement to shareholders.
He added that the share price would not be more than the amount derived from their respective value per share with reference to the equity value determined by the independent valuation expert using its own shares as consideration to increase its shareholding in the strategic regional business.
Kingdom has been battling to recapitalise its operations after former partner Meikles Limited withdrew its deposit of US$11,5 million.
As at June 30, 2011 the bank was capitalised to the tune of US$2,7 million, a far cry from the mandatory US$12,5 million.
Reserve Bank of Zimbabwe Governor Dr Gideon Gono said in his Mid-Term Monetary Policy Statement that Kingdom would raise US$15 million by October 31, 2011 and expected to meet the capital threshold by February 7 next year.
Shareholders of the company are also seeking to buy back at least 10 percent of the issued capital.
They are also seeking to place the balance of unissued shares under the control of directors that would be after the rights offer.
Online Reporter