Monday, December 06, 2004

Limited Options for Daima Bank

The Sunday Standard has a story on Daima Bank, which has been under statutory management by the CBK since March 2003.

Shareholders and depositors will meet on December 14th where they will be asked to accept a buyout of the institution or wind it up. Bank needs to be re-capitalized by 250 million shillings

Shareholder are being “pressured” to accept the offer on the table from First Africa Capital which they feel is too low i.e. to inject capital of 220 million shillings and pay depositors 25% of their money. (FAC is South Africa based company whose famous Kenyan face is Wanjiku Mugane) They will also take over 800m debts of the bank. Shareholders had rejected an earlier offer from First Africa to pay 22% of depositors

The article further alleges that CBK blocked two offers from Fina Bank (to pay 25% of their deposits) and Capital Alliance (to pay 65% of deposits) Earlier, Mbeki Enterprises Incorporated ( got cold feet and withdrew its offer to buy 49% of the bank for 250 m.

1 comment:

Anonymous said...


Thanks for the blog. It's much needed. How does the FAC offer work? How do they plan to obtain the remaining Kshs 30m? Are they using their own capital or are they representing other interested buyers? This would probably be FAC's first capital commitment (if they are using their own money) so it would be interesting to see how they can sell themselves given their lack of operating experience in the commercial banking sector. Also, what's Daima's value proposition? In Kenya's overbanked sector, there is an argument to be made for them to be allowed to either close shop or be acquired by an existing player...


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