NAIROBI, Kenya Nov 18 – The Kenya Power and Lighting Company (KPLC) has received regulatory approval from the Capital Markets Authority to carry out its capital base restructuring.
The Capital Markets Authority (CMA) said in a statement that it had approved the issue of an additional 76,622,891 ordinary shares at a par value of Sh20 each following the redemption by the government of its redeemable non-cumulative preference shares in the company.
The conversion of the non-cumulative preference shares will be followed by a share split of the share capital of KPLC on a ratio of 8:1 as per the Register of Members at the close of business on November 19.
In addition, CMA has granted approval for the issue and listing of up to 88,630,245 new ordinary shares of Sh2.50 each by way of renounceable rights to holders of ordinary shares of the company on the basis of 20 new shares for every 51 shares on the register of its members at the close of business on November 25.
The final phase of the restructuring will involve a rights issue where KPLC will be seeking to raise between Sh7 billion and Sh10 billion by floating 488.6 million new ordinary shares at the rate of 20 new shares for every 51 shares held.
"In approving the capital base restructuring transactions, the Authority is satisfied that the applications by Kenya Power and Lighting Company met the requirements of the Capital Markets Act, Cap 485A public offer regulations," CMA Chief Executive Officer Stella Kilonzo said.
According to KPLC Managing Director Eng Joseph Njoroge, all the three steps will run concurrently to ensure the rights issue kicks off in the stipulated period.
The offer price for the rights issue is expected to be announced on November 23, two days before KPLC kicks of the rights issue that closes on December 15.
The rights to subscribe for new ordinary shares are expected to commence on December 1, 2010 and trading of the new ordinary shares paid in full at the Nairobi Stock Exchange on January 24, 2011.
The capital restructuring will result in an increase in the number of ordinary shares from the current 79,128,000 to 1,734,637,373.
KPLC\’s authorised share capital is fixed at Sh18 billion out of which Sh15.9 billion (90.72 per cent) comprises redeemable non-cumulative preference shares with an interest coupon of 7.85 percent owned by the Government.
Through the restructuring, KPLC will make savings from the more than Sh1.2 billion annual payments to the Treasury, leaving it with cash to overhaul its ageing infrastructure and boost dividend payout to other shareholders.
Funds generated will be invested in the refurbishment and development of the country\’s power distribution network.