Eversheds has advised CRDB Bank Plc, the largest domestic bank in Tanzania, on its capital raising of approximately US$78 million through a fully underwritten rights issue on the Dar es Salaam Stock Exchange.
The net proceeds of the rights issue will be used primarily to maintain CRDB’s capital adequacy ratio as required by the Bank of Tanzania in line with the implementation of CRDB’s 5 year strategic plan, to fund network expansion in Tanzania and the wider region and to invest in IT systems and processes for efficiency improvement.
The Rights Issue, for which authority was granted at the Bank’s AGM in May, was underwritten by development finance institutions.
The Rights Issue was conducted on the basis of 1 new share for every 5 existing shares and was priced at 350 Tanzanian Shillings (TZS) per new share. The rights to subscribe were renounceable in favour of the underwriters, who committed to pay an additional 32 TZS per new share not taken up, which CRDB has passed through to compensate qualifying shareholders who elected not to take up their rights.
The Eversheds team consisted of a joint team with Abenry & Company, part of the firm’s Eversheds Africa Law Institute network, with Lucy Sondo (senior partner of Abenry & Company) and Josephine Mbuya providing advice on matters of the law of Tanzania and London-based principal associate Jon Stanley providing advice on English law and general capital markets matters.
The underwriters were advised by Clifford Chance in London and ATZ Chambers in Dar es Salaam.
Jon Stanley, Principal Associate, Eversheds, said:
“Over the last three decades the Eversheds Africa Group have advised clients in every African jurisdiction, using local lawyers who understand the national legislation and culture.
“It was very exciting to work on this innovative transaction in a jurisdiction where underwritten ECM transactions are relatively uncommon and to able to add value and insight gained from our international capital markets practice, while working alongside and learning from extremely professional and dedicated Tanzanian lawyers.
“Tanzania has enjoyed one of the best-performing economies in East Africa in recent years with GDP growth around 7%. There are significant opportunities for further international investment in Tanzania’s infrastructure and its broader economy.”
