Kenya’s Britam Buys $31m Stake In Mortgage Firm From Equity Bank

January 6, 2015 Niyi Aderibigbe M & A

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VENTURES AFRICA – Diversified financial services group, Britam has acquired 24.7 percent stake in mortgage finance institution, Housing Finance Ltd (HF). The shares held by Kenya’s Equity Bank cost Britam Sh2.78 billion ($30.6 million) and raises its shareholding in the firm to 46.08 percent.
A statement by the company, on Monday, disclosed that the transaction, which was initially due to be completed in September stalled until December 31, 2014 due to delays in regulatory approvals. Equity Bank was however able to escape paying millions in capital gains tax, which became effective on January 1, but fined Britam Sh48.5 million ($533,421) for not closing the deal according to schedule.
“The Board of Britam is pleased to announce that all of the conditions under the agreement have been fulfilled or waived (where applicable) and the completion of
the proposed acquisition took place on December 31, 2014,” said Britam’s company secretary, Nancy Kariuki, in an official statement.
Nairobi Securities Exchange (NSE) listed Equity Bank had on June 30, 2014 entered into a deal with Britam to sell its 57.7 million shares in HF to the financial service group. This was done as it sought compliance with Central Bank of Kenya guidelines stopping banks from having strong control on other financial institutions that are not their subsidiaries.
The new deal will give Britam strategic control of Housing Finance, whose shares sold at Sh46.75 on the NSE at the end of trading on Monday. The company is currently undertaking projects worth billions of shillings in Kenya.