• Shareholders want statement of affairs from central bank
  • Deposit payouts should be made on pro-rata basis, they say

Shareholders of Imperial Bank Ltd., one of three Kenyan lenders placed under statutory management since August, demanded a fair price for their assets that may be acquired by a rival lender as part of a process to rescue the company.

The Central Bank of Kenya announced on June 21 that NIC Bank Ltd. would take over some of Imperial’s deposits and assets after shareholders failed to provide assurances on how to reopen the bank. The lender was taken over by regulators in October after the central bank became aware of “unsafe or unsound business conditions’’ at Imperial.

“Any acquisition of assets must be at a fair price and premium in order that the inherent value in the bank’s assets will be available for return to depositors, bondholders and creditors,” according to a statement signed by shareholders including East African Motor Industries Ltd. and Kenblest Ltd. and published in Kenyan newspapers Friday.

The shareholders also demanded a “statement of affairs” be produced before any assets are cleaved off and information be provided on recoveries made so far. Plans to grant depositors access to about 40 percent of verified deposits above 2.5 million shillings ($24,680) would be detrimental to “large depositors” because they’re “far below the recoverable value of the assets of the bank.”

Pro-Rata Payments

It’s crucial that payouts “be made pro-rata in order to minimize any further value destruction through litigation by those who feel they are not being treated equitably and in accordance to the law,” the shareholders said.

NIC, Kenya’s ninth-biggest lender by market value, plans to obtain the Imperial assets in return for assuming the liabilities or deposits of the failed bank, Chief Executive Officer John Gachora said June 21. A due diligence study is under way and is expected to be completed by the time its receivership expires on Oct. 12, he said.

Kenya’s banking industry is consolidating after the collapse of three lenders over the past year and as the government tightens capital requirements for the industry. The $61 billion economy is over-banked, with 42 banks serving more than 40 million people, compared with 22 banks in Nigeria, which has a population of 180 million and gross domestic product that is nine times bigger, according to Cytonn Investments Management Ltd., a Nairobi-based money manager.

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