Chase Bank owners are set to be squeezed out of the industry after the Central Bank of Kenya (CBK) invited bids for a majority stake from local and foreign financial institutions.
Bidders have to submit proposals in three weeks, according to a statement issued by the regulator.
“Potential strategic investors interested in taking an equity interest in CBL (Chase Bank Limited) are hereby invited to provide an EoI, (Expression of interest) not later than 5pm (East Africa Time) on Friday, April 21, 2017,” said CBK in a statement.
The regulator expects to seal a deal with the successful bidder by the end of quarter one. Chase Bank was placed under receivership in April last year following a run on deposits after reports of liquidity problems spread online.
A sale will reduce main shareholders of the previously fast-growing bank, including former chairman Zaf Khan, into minority owners.
“The process and timing beyond June 26, 2017, will be informed by the structure proposed in the preferred investor proposal, but is currently intended that any resultant transaction will be completed before September 30, 2017,” said CBK.
The selected investor would have to inject capital to raise Chase Bank’s equity under a restructuring being pursued by the CBK.
CBK said that shareholders of the bank, as well as funding creditors, had been informed of the process.
CBK has appointed KPMG as its advisors in the process.
The bank was re-opened on April 27, last year, under the management of Kenya Commercial Bank and allowed to do all transactions including foreign exchanges and issuing loans albeit with reduced activities. To facilitate the sale process, CBK has extended the appointment of Kenya Deposit Insurance Corporation (KDIC) as a receiver manager for six months from April 7. CBK governor Patrick Njoroge last week said the regulator was committed to returning the bank to normalcy.
Credit: Business Daily