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Fidelity Bank acquired by SBM of Mauritius
Rank: New-farer Joined: 3/12/2014 Posts: 96
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meanwhile The Board of Directors of SBM Holdings Ltd (SBMH) wishes to inform its shareholders and the public in general that, subject to regulatory approval, it has at its meeting of 21 November 2016 resolved to proceed with the acquisition of Fidelity Commercial Bank (FCB), headquartered in Nairobi, Kenya with a network of 14 branches across the country and a total balance sheet as at June 2016 ofKenya Shillings 12. 9 billion. SBMH will acquire the entire share capital of FCB
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Rank: Elder Joined: 9/15/2006 Posts: 3,907
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Fidelity Bank: First Kenyan bank to be acquired for the princely sum of $1 USD, yes one US dollar. http://www.cnbc.com/2016...nyas-fidelity-bank.html
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Rank: Member Joined: 1/30/2016 Posts: 332 Location: Rift Valley
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And the article continues.. Quote:SBM said in a filing with the Mauritian bourse that it would inject 1.45 billion shillings of fresh capital into Fidelity, once the deal gets all the required regulatory approval.
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Rank: Elder Joined: 7/26/2007 Posts: 6,514
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Must have been insolvent. Business opportunities are like buses,there's always another one coming
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Rank: Elder Joined: 7/23/2008 Posts: 3,017
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KulaRaha wrote:Must have been insolvent. This is where deep understanding of accounting principles help. This is not an acquisition, its a merger, I can assure you the shareholders of Fidelity will receive equivalent value shares in SBM or whichever entity shareholders of SBM use as their dividend receiving vehicle. "The purpose of bureaucracy is to compensate for incompetence and lack of discipline." James Collins
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Rank: Elder Joined: 7/26/2007 Posts: 6,514
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Obi 1 Kanobi wrote:KulaRaha wrote:Must have been insolvent. This is where deep understanding of accounting principles help. This is not an acquisition, its a merger, I can assure you the shareholders of Fidelity will receive equivalent value shares in SBM or whichever entity shareholders of SBM use as their dividend receiving vehicle. I doubt this very much. The main shareholder was happy to give away Fidelity and walk. He hadn't paid salaries in months due to lack of funding and depositors were baying for blood. Business opportunities are like buses,there's always another one coming
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Rank: Elder Joined: 7/23/2008 Posts: 3,017
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KulaRaha wrote:Obi 1 Kanobi wrote:KulaRaha wrote:Must have been insolvent. This is where deep understanding of accounting principles help. This is not an acquisition, its a merger, I can assure you the shareholders of Fidelity will receive equivalent value shares in SBM or whichever entity shareholders of SBM use as their dividend receiving vehicle. I doubt this very much. The main shareholder was happy to give away Fidelity and walk. He hadn't paid salaries in months due to lack of funding and depositors were baying for blood.  May be you should not be allowed to post. Fidelity is a bank! do you understand how the prudential guidelines work, a bank will most likely not become insolvent, simply because its liquidity issues will be picked up months before any insolvency. Even Chase could have continued limping for another year had it been allowed. Secondly, which investor in his right mind can give away a company for free let alone a bank that still has a banking license. And still operational. When insolvency kicks on, the business valuation model changes, assets are carried at fair value, meaning the HO of say Fidelity Bank can increase in value 10 fold. The banking license is sold separately, the customer list, contracts, even accumulated tax losses are assets and are sold "The purpose of bureaucracy is to compensate for incompetence and lack of discipline." James Collins
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Rank: Veteran Joined: 11/21/2006 Posts: 1,590
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CBK announced the deal. That is telling...Probably has a list of foreigners who are interested in entering the market and just picked the call to one. I also recall the suspension of new licences sometime back. The two are linked. That berk signing the interest cap will wipe tier 3 and 4s which are now either unattractive or very cheap Sehemu ndio nyumba
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Rank: Elder Joined: 7/26/2007 Posts: 6,514
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Obi 1 Kanobi wrote:KulaRaha wrote:Obi 1 Kanobi wrote:KulaRaha wrote:Must have been insolvent. This is where deep understanding of accounting principles help. This is not an acquisition, its a merger, I can assure you the shareholders of Fidelity will receive equivalent value shares in SBM or whichever entity shareholders of SBM use as their dividend receiving vehicle. I doubt this very much. The main shareholder was happy to give away Fidelity and walk. He hadn't paid salaries in months due to lack of funding and depositors were baying for blood. May be you should not be allowed to post. Fidelity is a bank! do you understand how the prudential guidelines work, a bank will most likely not become insolvent, simply because its liquidity issues will be picked up months before any insolvency. Even Chase could have continued limping for another year had it been allowed. Secondly, which investor in his right mind can give away a company for free let alone a bank that still has a banking license. And still operational. When insolvency kicks on, the business valuation model changes, assets are carried at fair value, meaning the HO of say Fidelity Bank can increase in value 10 fold. The banking license is sold separately, the customer list, contracts, even accumulated tax losses are assets and are sold Ummm, Fidelity is a toxic asset: costs more to keep open and run that it earns. Liquidity issues were known months ago. CBK must have "convinced" Fidelity main shareholder to take a hike...they don't want to close another bank, do they? Fidelity assets are owned by the shareholder, Imperial style: that HO is not the bank's. SBM bought the license...probably most assets are non performing . Liabilities are due, and cannot be paid, the capital injection is needed to keep doors open. I think the shareholder got a great deal: Walk away from this hot mess and never see the inside of a court. Merger my foot LOOOOOOOOOOOOOOOOOOOOOOOOL !!!!! Business opportunities are like buses,there's always another one coming
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Rank: Elder Joined: 7/23/2008 Posts: 3,017
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KulaRaha wrote:Obi 1 Kanobi wrote:KulaRaha wrote:Obi 1 Kanobi wrote:KulaRaha wrote:Must have been insolvent. This is where deep understanding of accounting principles help. This is not an acquisition, its a merger, I can assure you the shareholders of Fidelity will receive equivalent value shares in SBM or whichever entity shareholders of SBM use as their dividend receiving vehicle. I doubt this very much. The main shareholder was happy to give away Fidelity and walk. He hadn't paid salaries in months due to lack of funding and depositors were baying for blood. May be you should not be allowed to post. Fidelity is a bank! do you understand how the prudential guidelines work, a bank will most likely not become insolvent, simply because its liquidity issues will be picked up months before any insolvency. Even Chase could have continued limping for another year had it been allowed. Secondly, which investor in his right mind can give away a company for free let alone a bank that still has a banking license. And still operational. When insolvency kicks on, the business valuation model changes, assets are carried at fair value, meaning the HO of say Fidelity Bank can increase in value 10 fold. The banking license is sold separately, the customer list, contracts, even accumulated tax losses are assets and are sold Ummm, Fidelity is a toxic asset: costs more to keep open and run that it earns. Liquidity issues were known months ago. CBK must have "convinced" Fidelity main shareholder to take a hike...they don't want to close another bank, do they? Fidelity assets are owned by the shareholder, Imperial style: that HO is not the bank's. SBM bought the license...probably most assets are non performing . Liabilities are due, and cannot be paid, the capital injection is needed to keep doors open. I think the shareholder got a great deal: Walk away from this hot mess and never see the inside of a court. Merger my foot LOOOOOOOOOOOOOOOOOOOOOOOOL !!!!! You do realise that CBK has no powers to enforce half the things you are mentioning above unless they place an institution under receivership? The rest of your post is just speculation, example, I don't think Fidelity's liquidity issues were as well documented as you put here. When you don't have facts, the simplest solution is probably the correct answer. Call it what you want but the owners did not walk away with 1 Usd. They got paid and got paid proper. "The purpose of bureaucracy is to compensate for incompetence and lack of discipline." James Collins
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Fidelity Bank acquired by SBM of Mauritius
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