Housing financier HF Group Plc has received KES6.4 billion in an over-subscribed Rights Issue, with a total subscription performance rate of 138.32 percent.

According to the CEO Robert Kibaara the outcome of the Rights Issue was “an overwhelming success” for the company. He added, “We went to our shareholders asking for additional investment of KES4.6 billion, upon conclusion of the process, we have received applications of KES6.38 billion. We are now firmly on the path to powering our next phase of business growth."

HF Group noted that the fresh capital will be vital in its five-year strategy that aims to transform the lender into a fully diversified financial institution.

“These funds will go towards expanding the growth of our business 85 percent (KES5 million) will go towards this while 15 percent will go towards technology and digitisation of the business to increase efficiency and customer experience,” explained Kibaara.

Additionally, the successful rights issue positions HF Group better, helping it to comply with new capital regulations requiring banks to raise their capital base.

“With this successful capital injection, the group is on course to fully comply with the new capital regulations that will see banks expected to grow their capital base to Kes10 billion by 2028,” Robert explained.

HF Group’s Rights Issue was priced at KES4 per share and offered shareholders the opportunity to subscribe for two new ordinary shares for every existing share held. It also included a green shoe option, allowing for an additional 30 percent allocation (equivalent to 384.6 million shares) to accommodate the oversubscription.

A green shoe option allows for a company to take up extra shares from a rights issue in order to meet high investor demands, as seen in this case.

Shares allocated through the rights issue will be uploaded to shareholders’ CDS accounts on Monday, December 23, 2024, with trading set to begin on the Nairobi Securities Exchange on Tuesday, December 24, 2024.

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