The Kenyan government has announced plans that could see the Kenya Pipeline Company (KPC) potentially listed on the Nairobi Securities Exchange (NSE).
John Mbadi, the Cabinet Secretary for National Treasury and Economic Planning, revealed the move on Thursday when he received an interim dividend cheque of Ksh3 billion from KPC board chairperson Faith Boinett for the half-year ending December 2024.
KPC is wholly owned by the Government of Kenya, with 99.9% shareholding by the National Treasury and less than 0.1% by the Ministry of Petroleum and Mining. But Mbadi said there are considerations to make it public through an initial public offering (IPO) as a way to raise capital and issue shares that will be tradable on the NSE’s Main Investment Market Segment for large corporations.
This, he explained, is expected to provide several strategic, financial, and operational advantages to KPC, the main one being unlocking access to one of the region’s largest pools of individual, institutional, and retail investors. This would enable the company to raise significant capital for expansion without increasing taxes or borrowing, said Mbadi.
“Listing will be a good idea, especially as KPC expands into the region. It will provide much-needed liquidity and capital for diversification into LPG. Kenyans will also have a chance to own a piece of KPC,” the Treasury CS remarked.
“We strongly believe that KPC stands to gain immensely from a listing at the stock exchange.”
> Companies Listed on NSE in Kenya
Companies going public through an IPO gain more recognition and attract potential customers and strategic partners because investors often view this type of listing as a sign of financial strength and stability.
An IPO is one way for a company to go public on a stock exchange, involving the issuance and sale of new shares to raise capital. This contrasts with listing by introduction, where a company lists its existing shares on a stock exchange without raising new capital. Instead of selling new shares to the public, current shareholders, such as private investors or employees, are given the option to trade their shares once listed.
The last recorded IPO at the NSE was in 2015 when Stanlib Investments issued an initial public offering for the first Real Estate Investment Trust (Fahari-Ireit) at the bourse. It raised Ksh3.6 billion against a target of Ksh12.5 billion, achieving a success rate of 28.8%.
If Kenya Pipeline proceeds with its IPO, it could be a significant milestone for the NSE and Kenya’s capital markets in general.
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