Panic at DFCU as key shareholder pulls out

It is not well at the second biggest bank in the country as a major shareholder exits.

Now, DFCU hopes it will get a buyer acceptable to the regulator and other stakeholders.

Meanwhile the bank has advised anyone who buys or sells shares of the bank to “exercise caution when dealing in the company’s shares until a further announcement is made.”

In an advertisement in newspapers on Monday, DFCU moved to downplay the development, although the actual purpose of the communication could have been to preempt the impact of the news if outsiders caught wind of the move.

The statement said, “Dfcu limited (the “company”) advises its shareholders and the general public that a significant minority shareholder has received and accepted an expression of interest for the purchase of its shareholding in the Company by another investor which, if successfully concluded, may have a material effect on the price of the company’s shares”.

DFCU added the “transaction remains subject to obtainment of regulatory approvals and satisfaction of all conditions precedent.

DFCU cautioned present and future investors to trade with caution.

Watchdog has not established yet which shareholder is pulling out however there is speculation that it is UK’s Commonwealth Development Corporation (CDC) Group which owns 9.97 per cent in DFCU.

News website Eagle online on Monday cited CDC’s Investment Director Irina Grigorenko’s letter to Dfcu Chairman Elly Karuhanga that CDC Group was intending to sell some or all of its shares. Grigorenko, according to Eagle online, wrote that CDC Group was “undertaking a review of its investment in DFCU Limited which may lead to the disposal or some of some or all of its shares in DFCU over the short to medium term.”

The other shareholders of DFCU are as follows;

Key shareholders in dfcu

DFCU Shareholding percentages

1. Arise BV 58.71 per cent
2. CDC Group of the United Kingdom 9.97 per cent
3. National Social Security Fund (Uganda) 7.69 per cent
4. Kimberlite Frontier Africa Naster Fund 6.15 per cent
5. 2 undisclosed Institutional Investors 3.22 per cent
6. SSB-Conrad N. Hilton Foundation 0.98 per cent
7. Vanderbilt University 0.87 per cent
8. Blakeney Management 0.63 per cent
9. Retail investors 11.19 per cent
10. BoU staff retirement benefit scheme is 0.59 per cent

The last two years have been challenging after the controversial acquisition of Crane Bank and its properties. Bank of Uganda has failed to defend its move to close and sell Crane Bank and that has spilled over to the operations of the once quietly operating financial institution.

Dfcu bank has of late decided to return freehold properties of Meera Investments Limited which had been leased to defunct CBL, back to Bank of Uganda, at a whopping cost of Shs47 billion even though it is understood it valued the same properties at Sh10 billion when it took over CBL.