NAIROBI, Kenya, May 10 – Kenya Electricity Generating Company Limited (KenGen) has received regulatory approval from the Capital Markets Authority (CMA) for the Sh28.8billion Rights Issue.
The firm intends to issue a total of 4.4billon shares, representing an entitlement ratio of two for every one share held, at a price of Sh6.55.
Book closure for shareholders eligible to participate in the Rights Issue is on May 16, 2016, with their entitlement credited into CDS accounts (or provisional allotment letter received by shareholder), on or around May 20 2016.
The government will take up their full entitlement representing 70 percent of the offering, through conversion of some loans on-lent by the Government to Kengen into equity in the tune of Sh20 billion.
According to KenGen’s information memorandum, the proceeds of the Rights Issue will be used partly to fund new geothermal and wind power projects so as to generate an addition 720 megawatts of electricity, up from 1,631 megawatts as at 30 June, 2015.
The funds will also inject new equity into the company, so as to create additional headroom that will enable it to access long-term loans at low interest rates, to facilitate its expansion.
The Rights Issue will open on May 23 2016, with closure on June, 10 2016.
Listing and commencement of trading of new shares at the NSE will be on 6 July 2016.
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.
Co-operative Bank of Kenya will be the receiving Bank for the Rights Issue.