BrazilPKF Consulting beats PwC to win contract for capital raising
International business advisory firm PKF Consulting has won a contract to help raise additional funds for the Kenyan government’s sale of the public Consolidated Bank of Kenya. The bank will be sold to private investors, and PKF’s target is to raise more than 2 billion shillings.
PKF is a global consulting network of independent firms that has more than 400 offices in over 150 countries. The network specialises in a range of financial services, including auditing, accounting, tax advisory, business solutions, and a number of others, serving both the private and the public sectors.
The network has a strong presence in the region of Eastern Africa — based out of Kenya — with member firms spread across Kenya, Uganda, Tanzania, and Rwanda offering services primarily in business development and accounting. The Eastern Africa presence of the firm amounts to 13 offices and 800 employees, including 40 partners.
Among the firm’s broad portfolio of clients are firms from the trade & retail, hospitality & leisure, agriculture, construction, transport & communication, and banking sectors. In the last area of expertise, the firm has now won a major contract, set to advise the Kenyan government on the sale of a major financial institution.
The Consolidated Bank of Kenya (CBK) was established in 1989 as a combination of nine Kenyan financial insitutions that were facing insolvency. The struggling banks were restructured to make operations more viable, and CBK has since grown into one of the most versatile banks in the country, laying special emphasis on supporting SMEs.
CBK is 78% government-owned, and has been primed for privatisation since 2006 — a scenario that is finally in the process of being realised. The bank is expected to be sold to private investors later this year, although it has yet to meet the laws on capital buffers, with the bank’s capital as a ratio of risk-weighted assets currently standing at just over 5.8%.
The minimum requirement for the ratio is 14.5%, a target that CBK will have to raise approximately 2.5 billion shillings to meet. In order to raise this extra capital, the bank called for tenders from the consulting industry earlier this year, and received offers from a number of firms, including Big Four accounting and advisory firm PwC.
Having taken all options into consideration, the bank has opted for PKF Consulting to assist with raising the capital. The bank contract will be signed by the consulting firm as well as with the privatisation commission, following the completion of the 14-day compulsory period designated for administrative review.
The sale of the bank is an attempt to deal with Kenya’s growing public-debt problem. The cumulative public-debt of the country currently stands at a staggering $775 million, which is amongst the highest figures in Africa.
