Kenya’s Equity Group is set to hedge a final Sh2.1 billion of the acquisition deal for a majority stake in Banque Commerciale Du Congo(BCDC). The move comes two years with Equity seen as aiming to consolidate its position against unforeseen liabilities in the future.
According to the agreement, the Sh2.1 billion will be held in an escrow account and partially remitted to the selling party over the next two years. The deal increases Equity’s investment to Sh17.8 billion, provided BCDC has no new liabilities.
Further, it provides a claims mechanism that enables Equity Group to seek compensation in certain circumstances post-completion and provisions that require $20 million (Sh2.1 billion) of the consideration to be held by an independent escrow agent for a period of up to two years post-completion that is available to offset any claims that might arise under the agreement,” reads the deal circular.
“Part of this escrow amount will be released 12 months after the completion data if no claims or any claims are existing have been finally settled, while the balance will be released 24 months after the completion date.”
Equity’s acquisition further deepens the lender’s regional footprint with Equity Bank Congo already under its book.