Rwanda Government to raise $42 mn by selling shares in Bank of Kigali and MTN

The Rwandan Government plans to raise Rwf25 billion ($42.2 million) through the sale of its shares in Bank of Kigali Ltd ( and telecom company MTN Rwanda ( in coming months.
The bank is Rwanda’s biggest lender by assets and it said the Government will sell a 20% stake to private investors in an Initial Public Offering (IPO) scheduled for June, according to a report on Bloomberg. In addition the bank will offer 25% of its shares to the public, according to the report, citing Chief Operating Officer Lawson Naibo. The Government owns 66.3% and will anticipate selling the rest of its stake later, according to John Rwangombwa, Minister of Finance and Economic Planning, during a press conference on 9 May on the budget framework. He is quoted in the New Times newspaper as saying: “BK is confirmed; we are to sell our shares through an IPO. We started the process and it’s expected to be concluded by September, including listing BK on the Rwanda Stock Exchange (RSE).”
Minister Rwangombwa said there is expected to be strong demand. Last November 2010, the Government sold 25% of Brassieries et Lemonaderies du Rwanda SA (BRALIRWA), a unit of Heineken NV (HEIA), and the IPO was 174% oversubscribed. BRALIRWA shares closed at RwFr 228, up 68% on the January launch price of RwFr 136.
BK plans to open 44 branches across Rwanda in 2011, and the stock should be attractive stock given its rapid growth and stability.
The Minister also said Government is in negotiations with MTN Group regarding its 10% stake in MTN Rwanda. MTN Group is majority shareholder and has the right of first refusal on any share sales. The Minister reportedly said: “We have two options; if MTN gives us (Government) the price we want, we will sell the shares to them directly while the other option is through an IPO depending on the other investor.”
The Treasury will include the expected proceeds in the budget for the next fiscal year. The Minister said: “This is part of the Government commitment to promote accelerated economic growth under its five year plan of EDPRS (Economic Development and Poverty Reduction Strategy 2008-2012) but also its the approach to liberalise the market.” Rwanda is a high-growth country and a top performer in improving its business and economic climate. It is working towards an ambitious long-term Vision 2020 that seeks to transform the country into a middle-income economy.
The Government remains keen to use IPOs to support the growth of the Rwanda Stock Exchange launched on 31 January by boosting market liquidity and ultimately supporting the country’s economic growth through attracting more inventors and increasing national savings.
The RSE has so far mainly attracted Treasury and corporate bonds, and 2 cross-listed Kenyan companies, Kenya Commercial Bank (KCB) and Nation Media Group. BRALIRWA is the only local listing.


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