Government raises Ksh106.7 billion from sale KPC IPO, with Rwanda and Uganda controlling 21%
Government raises Ksh106.7 billion from sale KPC IPO, with Rwanda and Uganda controlling 21%
Treasury CS John Mbadi has announced that Kenyans and local institutional investors purchased a total of 7.9 billion shares in the recently concluded Kenya Pipeline Company (KPC) Initial Public Offer (IPO).
According to the Treasury CS, regional neighbours led by Uganda and Rwanda also invested heavily in the offer, with the government raising a total of Ksh106.7 billion from the share sale.
Of the 12.4 billion shares offered during the IPO at a price of Ksh9 per share, Uganda, Rwanda and other members of the East African Community acquired a combined 3.8 billion shares.
Rwanda is reported to have purchased its allocation through the country’s pension funds at a time when Kenya has also announced plans to securitise and utilise employees’ National Social Security Fund (NSSF) savings for similar diversification objectives.
Mbadi dismissed claims that the shares were overpriced, saying certain unnamed individuals were intent on frustrating the process.
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He added that the government was forced to reject some bids due to oversubscription, including applications from EAC member states such as Uganda, which had expressed interest in acquiring a larger stake.
Despite the strong regional uptake, the government will retain a 35 per cent controlling stake in KPC, while the East African Community bloc will now hold a 21.22 per cent stake, equivalent to the 3.8 billion shares acquired.
Kenyans and local institutional investors bought a total of 7.95 billion shares from the IPO, translating to approximately 67.32 per cent of the total shares on offer.
“We offered 11,812,644,350 shares at 9 shillings each. The total number of shares applied for stood at 12,486,78,724, translating to an overall subscription rate of 105.7 per cent,” the CS said during the IPO results announcement on Wednesday.
Foreign investors, whom Mbadi had earlier dismissed claims that there were hidden plans to fully hand over KPC to, will now own a marginal 0.02 per cent stake in the company.
Under the final allocation structure, local institutional investors will control 41 per cent, retail investors 2.56 per cent, KPC employees 0.06 per cent, and licensed oil marketing companies in Kenya 0.041 per cent, bringing total ownership to 100 per cent.
The company is set to begin trading on the Nairobi Securities Exchange (NSE) from next week, on March 9, becoming the fifth listing on the current trading board.
On concerns that the proposed National Investment Fund (NIF), where part of the proceeds were expected to be channelled, is yet to be established, Mbadi said the funds would first be deposited into the Consolidated Fund before being transferred through parliamentary appropriation.
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