Helios Investment Partners, the UK firm that has entered into an agreement with the French company Orange over the takeover of Telkom Kenya, held a 24.99% stake in Equity Bank that it bought for about shs 11 billion in December 2007. When the investment firm was in talks with Orange, it decided to sell its initial Equity Bank shares for shs 52.5 billion at an average price of shs 41.74 a share which turned out to be a premium of around 10% on the share value.
“Helios sold its interests to Genesis (5.4 per cent), NSSF Uganda (2.44 per cent) and Norfund & Norfinance (12.2 per cent), with undisclosed stakes also bought by Investec, NSSF Kenya, African Alliance, Renaissance Capital and other investors” Business Daily reported.
From the sales of the shares, Helios made a cool shs 41.5 billion capital gain from the shs 11 billion it had invested seven years ago, but over the years it had also received over shs 6.5 billion in dividends, bringing the total returns to shs 48 billion. This represents well over 436% returns on investment.
Hardly two weeks after the sales of initial share holding, Helios has decided to buy more Equity Bank shares by purchasing 0.87 percent stake for shs 1.3 billion. Together with some shares the firm must have bought in the course of the seven years of investment on Equity Bank Shares, Helios now commands about 8.58% stake in Equity Bank. The recent purchase must have been made during one the big block trades on Equity shares at the Nairobi Securities Exchange.
What is not clear is whether the current investment is a long term commitment or a mere fly-by-night speculative investment. Commenting on the sales Helios made to the other investors, CEO of Equity Bank James Mwangi said that “the investors who acquired Helios’ stake have a long-term commitment and are ready to raise their stake or provide additional equity financing to further grow the bank”. The remarks came at a time Equity Bank continues with its regional expansion plan where the bank recently concluded a 79 per cent deal for a stake in ProCredit bank of the Democratic Republic of Congo.
Recently the country was shaken by the news that investors at NSE had lost over 120 billions shillings when the securities and stock market had fell to a two year low when the share index dropped by 10.5 percent to 4578 points, causing investors’ wealth to shrink to sh 2.18 trillion.
Helios exit of and return to Equity Bank should however bring good tidings to the bourse; and the performance of the banking industry in general should offer encouragement to the economy that had witnessed a downturn since the first quarter of 2015/2016 fiscal year. By the time of putting up this article, Equity Bank shares were trading at shs 42 a share at the NSE.