The amount is equivalent to 149.77 million shares that are set to be allotted to shareholders who were on the bank’s register by the close of business on May 12, 2020, subject to regulatory approvals.
AGM also gives nod to creation of an additional 606.19 million ordinary shares of Ksh5 ($0.05) each over a period of five years.
Regional lender NCBA Bank has recapitalised to the tune of Ksh748.87 million ($7.48 million) after shareholders approved a resolution for bonus shares rather than cash dividends to bolster the bank’s business amid the Covid-19 pandemic.
The amount is equivalent to 149.77 million shares that are set to be allotted to shareholders who were on the bank’s register by the close of business on May 12, 2020, subject to regulatory approvals.
At the bank’s virtual annual general meeting held on July 24, the shareholders also approved a resolution by the directors to create an additional 606.19 million ordinary shares of Ksh5 ($0.05) each over a period of five years (July 2020 – July 2025).
The additional shares will be used to increase the bank’s nominal share capital and make room for further capital injection through issuance of bonus shares to shareholders.
The bank’s nominal share capital now stands at Ksh7.96 billion ($79.6 million) comprising 1.59 billion ordinary shares of Ksh5 ($0.05) each.
NCBA managing director John Gachora told The EastAfrican that the creation of additional shares would enable the board to act quickly and address the bank’s capital requirements without waiting for the shareholder approval during the AGM.
“It makes it easier should the board need to issue bonus shares or react like we did for this time with Covid-19, where we submitted a previously announced cash bonus dividend for bonus shares. In future, we are avoiding waiting until an AGM before we can distribute such an offer,” said Mr Gachora last week, ruling out the possibility of future cash calls (rights issues).
“That (rights issue) is not on the cards for now. The reason is for the ease of transactions that may require shares. We found ourselves unable to distribute bonus shares in time, even when Covid-19 made it difficult for AGMs to happen.”
In April, the bank overturned a dividend proposal of Ksh2.24 billion ($22.4 million), replacing it with a bonus issue of one share for every 10 held. The move was to ensure the lender’s stability in a sector that has been adversely affected by the Covid-19 […]
