It is crunch time folks. This Friday it is down to the wire as the British-American Investments Company (Kenya) Ltd IPO closes. I will not bore you with our great history (we been there for 45 years by the way). So, why invest?
The people behind it
Look past the numbers. Look at the pedigree. The directors (& significant owners) include Mr. Peter Munga and Dr. James Mwangi. Do they sound familiar? Yes. Of the Equity Bank fame. They have proven experience in building a company and delivering services that most people need. What’s more is that they are LOCKED IN for 2 years for 73% of their shares. They win, We win. Need anyone say more?
What we will do with your money
No one is walking away ( with a black briefcase and whistling)with any of the cash we raise in this IPO. Unlike some Offers For Sale (OFS) or IPOs we have seen where existing shareholders cashed out, the money raised will go to GROW our British-American. We are ploughing it back so that in future our performance will drive sales up(and your share price), result into more dividends and build a company you can trust to deliver. KSh1 billion will be used to invest in Tanzania, fast-growing Rwanda & new South Sudan. KSh1.3bn will expand the Insurance footprint in Kenya as well as innovating & launching new products(less than 3% of us have insurance folks). We also will be putting money in property development. Not just the fancy houses you see in the Style network but housing for the growing middle class. Now that is a HUGE market.
We will also use the money to reduce debt. Check out the breakdown here.
The best performing firms are those that have Owner-Managers. Even the world’s greatest investors, the likes of Warren Buffet respect Owner-Managers. Why? They work to increase SHAREHOLDER WEALTH not just to earn a salary. So it is a pleasure to read that people like Jimnah Mbaru, Peter Munga, James Mwangi and Benson Wairegi are not only Directors but Shareholders.
Growing industry, economy
As Kenya (& the region) continues to grow faster than most developed economies, shareholders can expect higher profits and interest in our firms from foreign shareholders. Yes, times are tough, elections are near but there is a silver lining. We are in growing industries(insurance, asset management, financial services most of which have a penetration of less then 5%), growing economies and offering services that most east Africans need now and in future.
The Price and future appreciation
The price is quite attractive for most Kenyans at 9/- (with a minimum application of 2,000 shares) but it is not today’s price but the future value we need to keep an eye on. For this is not about today. This is about your future. Such opportunities come about once in a lifetime. Take it.
Rush to your stockbroker or bank for a piece of the IPO.