Close associates of former president Daniel Moi are set for an additional Sh370.85 million (1.29 billion) payout for selling a majority stake in Transnational Bank to Nigeria’s Access Bank.
The Nigerian lender has revealed in regulatory filings in Lagos that the extra amount will be paid over the next two years, pushing total payout for the deal to Sh1.58 billion (5.52 billion).
Access Bank acquired a 99.98 percent stake of Transnational Bank on July 20 and paid Sh1.21 billion in cash at the time of closing the deal.
Top owners of the 36-year-old Kenyan bank with 28 branches were companies owned by close associates of the late Moi, including Joshua Kulei, Simeon Nyachae and the former Vice-President George Saitoti.
The closure of the deal now paves the way for Access Bank, owned by business mogul Herbert Wigwe, to inject additional capital in Transnational, which had 0.25 percent stake in December 2018, as it seeks a return to profitability.
Access Bank says the entire deal was supposed to cost Sh1.62 billion (5.63 billion) but it received a discount of 4.24 percent.
“Transnational Bank’s shareholders received a total cash consideration offer Sh1.62 billion (₦5.63 billion) comprising of a cash consideration payment of Sh1.22 billion (₦4.23 billion) (and) a deferred payment of Sh410 million (₦1.408 billion) to be made to shareholders at the expiration of two years,” says the Nigerian lender.
“For the purpose of the bargain purchase computation, this deferred consideration has been carried at its present value of Sh370 million (₦1.29 billion) using a discount rate of 4.24 percent.”
Sovereign Trust, a company associated with Mr Kulei, a former aide of the ex-President, held 23.03 per cent shareholding in Transnational.
Simbi Investors, linked with Mr Nyachae, a former Cabinet minister during Mr Moi’s administration, held 8.2 million shares or 4.11 percent of the bank.
Losupuk Ltd, associated with the late Saitoti, holds 2.79 per cent. The bank’s chairman has been Henry Kiptiony Kiplangat, who is also the vice-chancellor of Kabarak University, an institution owned by the Moi family.Andre DeSimone, formerly CEO of Kestrel Capital, was also a director at Transnational but retired in December 2018.Kestrel Capital is linked to the late Nicholas Biwott, who was a powerful minister in the Moi administration.Other major shareholders are listed as Archers and Wilcock Ltd with a 23.75 percent stake, and Kenyerere Ltd — associated with Jared Kangwana — with a 2.15 per cent stake.Mr Kangwana last year got approval to raise his stake […]
