Diamond Trust: Third Rights

Diamond Trust Bank is back to shareholders for some fund raising after two rights issues in 2006 and 2007. 
Since venturing into  Uganda and Burundi in  2008, it has become a pan-African bank growing from assets Kshs 45 billion and Kshs 1.6 billion in profits to 2011 assets of  Kshs. 107 billion and profits of Kshs 4.3 billion. The additional  funding will be invested in Tanzanian Uganda and Burundi as well as alternative channel categories.

Like the previous issues, this one closing on Friday August 10, is likely to exceed full subscription. All the large investors – Aga Khan Group (AK fund for economic development fund  (owns 17%), Habib Bank (11%), Jubilee Insurance (10%), and the International Finance Corporation (IFC owns 10%) have committed to take up their rights.
The above commitments are for 51%, and with the minimum target is 60%, there’s a rump option in in case other shares are not taken up but it’s expected that most of the 11, 242 shareholders will pay up (there was little trade in rights when it opened).

Contrasting Rights
Year – Nov-06 ; Nov-07 ;  Jul-12
Target (Kshs M) – 735 ; 1,600 ; 1,809
New shares (M) – 15.5 ; 23.3 ; 24.4
Price (Kshs)  – 50 ; 70 ; 74
Ratio  –  1:8 ; 1;6 ; 1;8
Budget (Kshs M) 41.6 ;  54.7 ; 57.6
 

Others
– IFC has also provided funding of about $65 million for the banks operations.
– All the arms of the company are profitable; Kenya profit after tax of Kshs 2.2 billion in 2011, Tanzania (own 55%) Kshs. 398 million, Uganda (own 54%) Kshs. 315 million and Burundi  (own 67%) Kshs. 31 million
 – Diamond Trust only owns 3 of their branches in Kenya (out of 38) , and none of the 22 in Uganda, 14 in Tanzania or 4 in Burundi.
– There’s no indication of interest to venture into Rwanda or South Sudan as with many other Kenyan banks.