British American Investment Co., the Kenyan financial-services company, said it received bids for 60 percent of the shares on sale in its initial public offering as demand was curbed by the U.S. debt crisis.
The company raised 3.5 billion shillings ($37.6 million), compared with the 5.85 billion shillings it had sought, it said in an e-mailed statement today from Nairobi. The offering of 650 million shares attracted only 23 foreign investors and 72 institutional buyers, it said.
“Generally the market conditions at this time were not conducive; inflation is high, interest rates are up,” Suki Muia, an analyst at Nairobi-based Kestrel Capital East Africa Ltd., said in a phone interview today.
The Nairobi Stock Exchange’s All Share Index has fallen 31 percent over the past 12 months and is the world’s fourth-worst performing equity measure over that period, according to data compiled by Bloomberg. Inflation in East Africa’s biggest economy surged for the ninth straight month in July to 15.53 percent, while the shilling weakened to 95.1 per dollar on Aug. 9, the weakest intraday level since 1994.
British American, whose shares will begin trading on the Nairobi Stock Exchange on Sept. 2, sold 390.6 million shares at 9 shillings each, it said. The company said earlier this month the funds raised will be used to finance its expansion.
“The board of directors will now have to prioritize on some of our projects and the timing for their implementation,” Wairegi said in today’s statement.
British-American Investments Co. is the holding company of Kenya’s British American Insurance Co., British American Asset Managers, a fund manager that began operations in 2004, and Britam Insurance Co. Uganda Ltd., established in November 2010, according to its website.
“We have surpassed the minimum success threshold of 50 percent set out in the prospectus and also met the minimum shareholder’s requirement of 1,000 to list on the main investment market segment of the Nairobi Stock Exchange,” Chairman Nicholas Ashford-Hodges said in the statement. The company now has 28,000 shareholders compared to seven before the IPO that closed on Aug. 5.
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