AA Kenya, mainly associated with driving lessons and car rescue plans to raise Sh230 million from a restricted public offer that convert its members into shareholders.
This follows an approval by Capital Markets Authority (CMA).
In the move, the offer to members of AA Kenya Holding Company Limited is for 7,762,881 shares at an offer price of Sh25.80 and an additional 3,681,999 shares at a par value of Sh8 for the employees of AA Kenya.
Restricted issue of securities is those made only to professional investors on a restricted market sub-segment.
The company seeks to raise Sh229,738,322 to scale up the business through diversification and expansion.
The offer will also provide employees with a chance to become owners of the business, recognising their role in driving growth, while fostering ownership and commitment.
‘‘The offer by AA Kenya is a notable milestone for the capital markets industry since it promotes growth of the aggregate market turnover, while supporting the Government agenda of facilitating additional listings at the Nairobi Securities Exchange," said CMA Chief Executive Officer, Wyckliffe Shamiah.
He said the issuance confirms that long-term capital is available to support business growth and expansion through the public markets.
The offer follows approval by AA members at an Extraordinary General Meeting and will run in October 2023.
AA Kenya chief executive, Francis Theuri, said the move will help the firm adhere to the standards set by the Federation Internationale de l'Automobile (FIA).
"This approval marks a significant milestone for AA Kenya and represents a major victory for our valued customers and shareholders. One of the key foundations of our strategic plan is to enhance our business by diversifying and expanding, allowing AA Kenya to benchmark itself against other AA organisations worldwide,” said Theuri.
He emphasised that AA is closely affiliated with FIA, the authoritative body governing global motorsports and uniting the world's foremost mobility organisations.
The government has been pushing SMEs to join the Nairobi Securities Exchange to enable them raise funding and increase activities at the bourse.
CMA in May made rule changes that led to the creation of two distinct segments specifically designed for SMEs.
The changes are geared towards enabling growth and enterprise Markets segment to raise capital through the capital markets.
CMA disclosed in its third-quarter market soundness report that the proposed modifications outlined in the draft Capital Markets (Securities) (Public Offers Listing and Disclosures) Regulations, in conjunction with the recently published Investment Based Crowdfunding regulations, will establish a fresh avenue for capital acquisition for small and medium-sized enterprises (SMEs).
This development is particularly beneficial for SMEs that have historically faced challenges accessing financing from traditional banks.
