NAIROBI, Kenya, Apr 27 – Bread company DPL Festive has suspended plans to list in the Nairobi Stock Exchange (NSE) for at least two months.
Festive had initially announced plans to list on the bourse in March in a bid to raise Sh700 million while off loading 40 percent of its stake to the public.
“We have decided to delay the process due to the underperformance of the NSE,” Dipesh Shah told Capital Business.
He Shah confirmed that the company had received approval from the Capital Markets Authority to forge ahead with the process but that they had decided to wait for a while.
DPL Festive had launched the IPO with the intention of raising additional capital to finance its expansion plans and improve the company’s marketing and distribution network.
While announcing the initial IPO plans Mr Shah had opined that raising capital through the bourse would be a cheaper option to borrowing a bank loan.
Standard Investment Bank Ltd and PKF Consulting Ltd were to be the Transaction Advisors for the issue.
The stock market has been bogged down by among other things the loss of investor confidence locally and the flight of foreign investors from the market blamed on the global economic down turn.
The NSE share index currently stands at just about 2500 while it averaged at between 4500 and 5000 about 2 years ago.
DPL Festive was originally a plastic company that converted to a bread company after an industrial accident brought to a halt operations of the original Dippoly Plastics Industries Ltd in 1999.
The company begun initial operations with a capital base of about Sh10 million.