Dfcu, Arise deny reports that major shareholders are exiting

Dfcu Limited and its wholly owned subsidiary, Dfcu Bank, have denied rumours that its two largest shareholders are seeking to sell their stakes in the company, which is listed on the Uganda Securities Exchange.

In an email to Dfcu Bank staff on Saturday, the lender’s chief executive Juma Kisaame said “negative stories claiming that two of our shareholders (Arise B.V. and CDC) are exiting dfcu Limited” are “malicious reports intended to distract us from our purpose of making more possible.” Dfcu is Uganda’s second biggest bank by assets.

The email referred to a press conference held by Dfcu Limited’s chairman and its general manager on Friday “to clarify the position of the top shareholders”. It also included an attachment of a press release by Arise B.V., Dfcu’s biggest shareholder with a 58.7% stake, that said the investment company is keeping its investment in the company.

The statements are in response to reports that CDC Group PLC, Dfcu’s second largest shareholder, is seeking to substantially reduce its stake or exit altogether. The reports were first published by ChimpReports, a news website, before being picked up by other news platforms. The claim that Arise B.V. was also looking to exit its stake appeared in those subsequent reports.

“Arise will continue to support any future growth plans of Dfcu to contribute to a strong and efficient bank,” Deepak Malik, Arise’s chief executive, said in the statement dated Friday, 6 July.

Unlike Arise, CDC Group has not denied that it is looking at selling off its share in the company. In a comment to the Daily Monitor newspaper, its spokesperson said they will not comment on “leaked information” and “on any sale process.”

ChimpReports reported that CDC’s investment director in charge of financial institutions, Irina Grigorenko, wrote to Dfcu’s management and said CDC was “undertaking a review of its investment in DFCU Limited which may lead to the disposal or some of some or all of its shares in DFCU over the short to medium term.”

“It is our aspiration to exit in a manner that causes minimum disruption to the business and ensures the orderly trading of DFCU’s shares,” said Ms Grigorenko, according to the website.

CDC’s relationship with Dfcu goes back to its very beginning in 1964 – at the time CDC was still the Commonwealth Development Corporation of the United Kingdom – when it was set up in partnership with the Uganda government to provide long time financing to small and medium enterprises. It remained the company’s majority shareholder until 2013 when it reduced its stake from 60% to 15%.

Read More: Company Profile: Dfcu Group

Arise B.V., a Cape Town-based investment company, became Dfcu’s majority shareholder last April after the company’s two previous largest shareholders with a 27.54% stake each, Rabo Development B.V (Rabobank), and Norfinance AS (Norfund), transferred their shares to Arise. Rabobank and Norfund acquired their stakes from CDC in 2013.