National Treasury Cabinet Secretary Henry Rotich says the government, which owns a 70 percent stake at KenGen, will be converting loans lent to the company into equity/FILE
NAIROBI, Kenya, May 23 – The Kenya Electricity Generating Company (KenGen) will now be seeking to raise Sh8.64 in its Rights Issue, after the government decided to take up 3 million shares valued at Sh20.2billion in the issue.
National Treasury Cabinet Secretary Henry Rotich says the government, which owns a 70 percent stake at KenGen, will be converting loans lent to the company into equity.
Rotich was speaking during the launch of the Sh28.8 billion Right Issue on Monday, where a total of 4.4million shares are on offer, representing an entitlement ratio of 2 for every 1 share held, at a price of Sh6.55.
“KenGen is looking to raise funds for its infrastructure. On the part of the government we support this and that is why we have taken up our rights. You have seen me signing the share certificate to actually take up Sh20.2 billion out of the Sh28.8billion required,” Rotich said.
The other shareholders have now been left with 1million shares, expected to raise Sh8.64 billion.
The rights issue will open for three weeks and will close on June 10, 2016 while the listing and commencement of trading of new shares at the Nairobi Securities Exchange (NSE) will start on July 6.
Lead transaction advisors for the offer are Standard Investment Bank and Renaissance Capital, while Dyer and Blair Investment Bank and Faida Investment Bank are the lead sponsoring stockbrokers.
“By participating in the offer, shareholders will contribute to the growth of the company and reap more from our dividend scheme, which is one of the most competitive, reliable and sustainable in the country,” KenGen Managing Director and CEO Albert Mugo noted.
The Rights Issue comes 10 years after the company’s Initial Public Offering (IPO) in 2006, which at the time was the largest on the NSE.
With the additional capital, KenGen plans to commission an additional installed capacity of about 720Megawatts (MW) mainly from affordable, clean and environmental friendly sources. At the moment the power generator’s installed capacity is 1,618MW.
Among the projects lined up is the drilling programme for 140MW Olkaria VII, which is scheduled for delivery by 2020.
The company also expects to complete 25MW of early generation geothermal wellhead project by June 2016, bringing the total capacity on wellhead generation to 75MW.
The 140MW Olkaria V and 80MW Meru Wind phase I are expected to come on stream in 2018 and have already attracted funding from development partners, including the French Development Agency (AFD).
