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Kingdom’s rights issue sets record

Conrad Dube

KINGDOM Financial Holdings Ltd (KFHL)’s four-for-one rights issue has raised $101 billion.

Kingdom is one of the

few indigenous quoted financial services companies to weather last year’s banking storm.

This is arguably the largest rights offer on the Zimbabwe Stock Exchange (ZSE).

KFHL said in a statement this week: “The successful rights offer will positively enhance confidence levels to Kingdom’s benefit and it points to a shared belief in future growth amongst shareholders, both institutional and individual.”

Analysts say the overwhelming response to the offer demonstrates shareholder and investor confidence in the value offered by KFHL.

This level of response to the rights offer points to the confidence that the market has about Kingdom and the potential it possesses with sufficient capital, solid shareholders and a good management team.

It also represents a sound launch pad for this year for the diversified financial services group, when taking into account developments of 2004, which saw the unprecedented collapse of more than five commercial banks.

“This successful capital raising exercise will have a direct impact on the group’s ability and capacity to take advantage of opportunities in the financial markets,” KFHL said.

KFHL is also actively pursuing an acquisition in Botswana as it attempts to break into the diamond-rich southern African country’s domestic market.

The acquisition is in line with the financial services group’s expansion drive in the region. KFHL says expansion into the region has continued to grow in recent years and will become stronger as critical mass is enhanced.

“Kingdom is actively pursuing an acquisition in Botswana, which will enable them to move into the Botswana domestic market, subject to regulatory approvals,” the group said this week.

“The geographical spread of Kingdom’s operations, within high growth economies in southern Africa, will also diversify its income streams thereby reducing the risk associated with operating within one country.”

Locally, the bank views the financial environment as creating new opportunities to expand the business model at compelling acquisition costs and that these opportunities will be considered as they arise subject to their ability to make a positive contribution to Kingdom’s operations.

“The significant and consistent growth delivered by the company (KFHL) since its listing on the ZSE can be attributed to clients who have demonstrated confidence in the group from inception and executives who have extensive experience in their respective areas of operation,” the bank said.

The group believes that management who “continually adopt a proactive, innovative approach to winning and retaining business, and staff who embrace the group’s culture of dynamism and innovation based on its ‘Team Kingdom’ ethos have helped steady the “ship in stormy financial waters”.

Kingdom’s diversity has not only made the group a “one-stop shop” financial institution, but has also allowed it to effectively maximise group synergies and cross-selling of products for the benefit of clients and shareholders.

The four-for-one $100 billion rights offer opened two weeks ago. The proceeds will help KFHL consolidate its position in the changing financial landscape.

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