Dfcu Limited, the holding company of Dfcu Bank, raised Shs190.6bn in a rights offering to settle a shareholder loan the lender took to meet short-term capitalisation needs after taking over Crane Bank in January.
In an announcement by Dfcu, James Mugabi, the company secretary said the Shs200bn rights issue was 95.21% subscribed.
“The successful rights issue, whose purpose was to raise capital necessary for ensuring that Dfcu’s banking subsidiary (Dfcu Bank) is adequately capitalised has delivered a much stronger balance sheet and a strong base for dfcu to implement its aggressive growth strategy,” Mr Mugabi said.
The rights offer was opened early last month and was to see shareholders receive 0.53 new shares for every one they own. The company issued 263,157,895 new stock at Shs760 per new share on the Uganda Securities Exchange. The rights issue closed on 25 September.
Arise B.V., whose $50m loan – equivalent to Shs180bn – to the company the rights issue was to settle, increased its shareholding in Dfcu to Shs58.71% from 55.08% after buying 165,328,947 new shares for Shs125.65bn.
The Cape Town-based investment company became Dfcu’s majority shareholder in April after the two previous largest shareholders with a 27.54% stake each, Rabo Development B.V, and Norfinance AS (Norfund), transferred their shares to Arise.
Arise was founded last year by Norfund, FMO and Rabobank to control the sub-Saharan Africa banking assets owned by the three European firms.
Deepak Malik, the fund’s chief executive, told Bloomberg in February that it would convert its loan to Dfcu into equity by taking a stake in a rights offering.
The National Social Security Fund Uganda (NSSF) also increased its shareholding to 7.69% from 6.28%, the statement said.
CDC Group PLC, the second largest shareholder, had its shareholding reduced to 9.97% from 15% after sitting out the rights issue. This is due to its “strategy to significantly reduce its stake in Dfcu by selling to other, like-minded investors who could bring in a new phase of growth,” according to Dfcu’s statement.
The new shares will be listed on the Uganda Securities Exchange on Tuesday, 10 October, Dfcu said.
Dfcu Bank reported a 389% year-on-year growth in after-tax profits to Shs114bn in the first half, which it attributed to its acquisition of Crane Bank. Total assets increased to Shs3,053bn from Shs1,623.30bn. At the end of 2016, Dfcu’s balance sheet was Shs1,757.72bn.
Earnings per share of Dfcu Limited rose to Shs459 in the period from Shs94 last year, and from Shs91.16 in 2016.