PNG’s Kina Securities to raise $91m for growth

ASX-listed Papua New Guinea wealth manager Kina Securities has launched an equity raising through Morgans to secure $91 million.

It comes with Westpac said to be close to selling its Pacific banking operations, as first flagged by DataRoom on August 31, with expectations that groups such as Kina Securities, Bank of South Pacific and French bank BRED will be the logical acquirers.

It is understood Kina Securities is one of at least two parties in contention to buy the business.

Shares are being sold at 80c each, which is a 14.4 per cent discount to the last closing price of 93.5 cents.

On offer are 13.1 million shares by way of a placement to raise $10.5m, and 87.3 million shares for a non-renounceable entitlement offer to raise about $70m.

The entitlement offer will be equally split between retail shareholders and institutional shareholders.

In a term sheet sent to investors, Kina Securities said the proceeds were being used to expand the capital base of the bank, enabling it to further pursue growth opportunities and also fund additional strategic projects to enhance its “digital leadership”.

Kina Securities was established in Papua New Guinea in 1985 and is the country’s largest provider of wealth management. It offers savings accounts, small business loans, investments to mortgages, stockbroking and financial advice, investment management and funds administration.

In 2015 its wholly-owned subsidiary Kina Bank listed on the Australian Securities Exchange and Port Moresby Stock Exchange. It purchased Maybank PNG from Malayan Banking Berhad that same year.

Morgans managed the selldown of Kina Bank in 2018 by major shareholder Fu Shan Investment.

In June 2018, Kina Bank announced the acquisition of ANZ PNG’s retail, commercial and small to medium enterprise businesses, including all retail branches, ATMs and EFTPOS terminals, making Kina Bank the second largest retail bank in PNG with a comprehensive national footprint.

Westpac sold South Pacific banking operations in 2015, including those in Samoa, Cook Islands, Solomon Islands, Vanuatu and Tonga to the Bank South Pacific for $125m.

At the time, this left Westpac with its operations in its largest Pacific markets of Fiji and Papua New Guinea.

The Pacific Bank has been deemed non core by Westpac.