, NAIROBI, Kenya, Mar 6 – The Kenya Electricity Generating Company (KenGen) Sh15 billion Rights Issue may kick off from August this year and not in June as earlier anticipated.
KenGen Managing Director Albert Mugo says talks with the government, which is the majority shareholder are yet to be concluded.
The government which owns 70 percent stake at KenGen has been considering a deal to convert its debt into equity to defend its position at the company.
“We have been discussing with government and we are at the very final stages of the approvals that the State requires, and we expect that before the end of this month we will have gotten the approvals so that we can start the program,” Mugo said.
The company has already started the procurement of the transaction advisor, indicating that all is set to kick off the process.
KenGen is hoping to raise over Sh30 billion in the Rights Issue, with the Sh15 billion coming from other shareholders while the rest is expected to come from the government.
“The loan that we expect the government to convert is in the region of about Sh20 billion,” Mugo said.
The Rights Issue is targeted at financing new projects comprising mainly a mix of geothermal and wind energy to boost KenGen’s power generation capacity in the next three years to increase its power output to 3,000MW by 2018 from the current 1,239 MW.
Mugo was speaking on Friday while announcing the company’s performance for the half year ending December 2014. KenGen made a net profit of Sh4.9 billion compared to Sh1 billion in the same period in 2013, representing a 384 percent rise.
“Our revenue moved from Sh8 billion to Sh11 billion, and that was mainly contributor of that was about the three months of full running of the geothermal. We expect the other half year, when that geothermal plant will half run at the 280MW capacity, the results will even be better,” he said.