Shareholders of the Kenya Electricity Generating Company (KENGEN) can now take up their entitlement in the rights issue following the opening of the offer yesterday. KenGen is offering a total of 4, 396, 722, 912 new ordinary shares at a discounted price of Ksh6.55 per share to raise Ksh29 billion for business expansion.
The Rights Issue closes on Friday June 10, 2016.
Speaking during the launch of the rights issue in Nairobi, KenGen Managing Director and CEO Eng. Albert Mugo said the offer would give shareholders an opportunity to reap more from the company, which has consistently posted impressive financial results. “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,” said Eng. Mugo.
The Government, which is the principal shareholder, has taken up its full entitlement of rights, representing 70% of the transaction, through the conversion of some of the loans on-lent to KenGen into equity (shares). Eng. Mugo termed the move by the Government a vote of confidence in the company’s future and urged other shareholders to take full advantage of the offer and increase their investment in the company.
KenGen , which is the leading energy generator with more than 70% market share, has lined up a number of energy generating projects for development, making it necessary to raise additional funding through the Rights Issue and other avenues.
The company plans to commission an additional installed capacity of about 720MW mainly from affordable, clean and environmental friendly sources. The power generator’s installed capacity is 1,618MW. “With the country’s power demand expected to cross the 4,000MW mark by 2020. Success in the future is dependent on early planning and that is why we are asking shareholders to take up their rights at this time so that we can have enough capital for expansion,” said Eng. Mugo.
The rights issue comes 10 years after the company’s Initial Public Offering (IPO) in 2006. Among the projects lined up is the drilling programme for 140MW Olkaria VII , which is scheduled for delivery by 2020. The company expects to complete 25MW of early generation geothermal wellhead project by June 2016, bringing the total capacity on wellhead generation to 75MW.
Plans are also underway to begin 70MW Olkaria 1 Unit 6 and complete upgrade of Olkaria 1 Units 1, 2 and 3 to 50.7MW by 2017. 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).
