Belgian investment firm to take up 10% of SDB Bank for Rs. 925 m via SPO

SANASA Development Bank (SDB Bank) yesterday announced that it has entered into an agreement with the Belgian Investment Company for Developing Countries (BIO) for the latter to take up a 10% stake for Rs. 925 million via the Secondary Public Offering (SPO). 

The placement with BIO is as a cornerstone investor under the identified investor category of the SPO, which is in total is offering 88 million shares at Rs. 51.50 each to raise Rs. 4.5 billion. SDB Bank share yesterday closed at Rs. 50.80, up by 30 cents.

SDB Bank said BIO had expressed interest to acquire 10% shareholding in the bank. The equity move is in addition to the investment made by BIO in SDB Bank in 2019 amounting to $ 8 million in unlisted subordinated term debt under Tier 2 Capital of SDB Bank.

SDB Bank said on 9 July it entered into an investment agreement with BIO. 

Subject to the completion of the conditions, precedent stated in the Investment Agreement, BIO will subscribe to 17.95 million shares in the SPO at the Issue Price of Rs. 51.50 per share worth Rs. 924.8 million, assuming a full subscription of the total issue subject to the limits set out in the Banking Act No. 30 of 1988 (as amended). 

SDB Bank said the proposed investment by BIO would, if completed, result in the subscription of approximately 20% of the SPO, assuming full subscription of the total issue.

BIO is a development financing institution fully owned and funded by the Belgian State and a member of European Development Finance Institutions which supports the private sector in developing countries to contribute to their economic, social prosperity and reduce poverty by directly and indirectly invest in Small and Medium Enterprises (SMEs) in emerging and developing countries.

The SDB Bank also said opening date of the SPO and the date on which the Prospectus and Application Forms will be made available to the public in due course.

The SPO’s initial amount will be 68 million shares at Rs. 51.50 and a further 20 million shares at the discretion of the Board of Directors.