This archive report was first published on 2 September 2021.
Published on September 3, 2021, Nairobi Business Ventures (NBV) has made a rare move by paying its transaction advisers with shares instead of cash.
The company will give its advisers six million shares as compensation for their services in helping it purchase four companies, marking a rare non-cash payment for professional work among Nairobi Securities Exchange-listed firms.
According to a circular to the firm's shareholders, the six million shares will be equivalent to a 0.44 percent stake in the company once the transactions are completed.
Transaction advisors are typically paid in cash, but NBV's move to pay its advisers in the form of shares indicates the firm's quest to preserve cash.
Analysts say the arrangement NBV has with the advisors is unprecedented and may signal that the professional firms are keen to acquire a stake in the company.
It may also present potential conflicts of interest as the advisors are looking to become shareholders, a corporate governance specialist told Business Daily.
NBV has not indicated the price at which it will issue the shares to the advisors.
The four companies worth Sh3.4 billion to be acquired by NBV are owned by its new chief executive Haresh Soni and his associates who will be issued with a total of 857.6 million shares in the NSE-listed firm as their compensation.
