DAR ES SALAAM – Tanzania’s CRDB Bank Plc has secured $78 million in funding for expansion in East and Central Africa through a rights issue on the Dar es Salaam Stock Exchange writes Joseph Burite.
Law firm Eversheds advised CRDB Bank Plc.According to Eversheds the Rights Issue was conducted on the basis of one new share for every five existing shares and was priced at Tsh 350 per new share.
The rights to subscribe were renounceable in favour of the underwriters, who committed to pay an additional Tsh32 per new share not taken up, which CRDB has passed through to compensate qualifying shareholders who elected not to take up their rights.
According to a statement by Eversheds, the money will mainly be used to maintain CRDB’s capital adequacy ratio as required by the Bank of Tanzania in line with the implementation of CRDB’s five year strategic plan.
The rest will go to paying for network expansion in Tanzania and the wider region and to invest in IT systems and processes for efficiency improvement.
The Rights Issue, for which authority was granted at the Bank’s AGM in May, was underwritten by development finance institutions.
Josephine Mbuya provided advice on matters of the law of Tanzania and London-based principal associate Jon Stanley providing advice on English law and general capital markets matters.
The underwriters were advised by Clifford Chance in London and ATZ Chambers in Dar es Salaam.
Jon Stanley, Principal Associate, Eversheds, said: “Tanzania has enjoyed one of the best-performing economies in East Africa in recent years with GDP growth around 7%. There are significant opportunities for further international investment in Tanzania’s infrastructure and its broader economy.”