December 31, 2007: Olympia Capital Holdings’ pursuit of a continental dream in the second half of the year has provided investors with another liquid counter at the Nairobi Stock Exchange.
Entering the year with the lowest number of shares in the industrial and allied segment, the supplier of materials in the housing and construction industry has seen its share price jump from Sh29.50 to Sh58 after adjusting for a rights issue floated to back the expansion into South Africa and Botswana.
At the start of the year, Olympia’s 10 million shares in the market were affected by illiquidity as most of them were held by principle shareholders who hardly trade in the secondary market. Three months into the year, however, Olympia had lost a controlling stake in its Botswana associate company, Olympia Capital Corporation Limited.
“We had lost control of our gem, Olympia Capital Botswana,” said Michael Matu, the group CEO of Olympia Capital Holding Limited, after opting out of a rights issue there. Olympia Capital Corporation, its Botswana associate company, fully owns Kalahari Floor Tiles (KFT) and has a 74 per cent stake in Plush Products, which it acquired towards the end of Last year. Kalahari Floor Tiles owns Gaborone Enterprises Limited, a property investment company.
Seeking to regain a controlling stake in the Botswana firm, Olympia Capital Holding raised money at the Nairobi Stock Exchange by selling more shares to existing share holders and the general public through a rights issue in September.
Shareholders were offered to take up three shares for every one held at a price of Sh14, which was a discount of 30 per cent of the average price in the first six months of the year.
The move increased its available shares for trading to 40 million from 10 million. Before the commencement of trading of the news shares following the rights issue, the shares were at Sh17.95, on commencement of the new shares they took a 15 per cent dip to trade at Sh15.15.
“I believe after the rights issue the shares were correctly priced,” says Charles Ocholla, head of investment banking and fund management, Suntra Investment Bank.
The rights helped Olympia to realise Sh420 million for its expansion plans. Olympia Capital Holdings Limited (OCHL) used Sh82 million of the money to acquire additional shares in Olympia Capital Corporation (OCC), bringing its stake to a controlling 50.49 per cent. The rights issue has given Olympia more room to expand.
