KenGen’s board has approved a rights issue plan and will seek shareholder approval on 16th December 2015. The plan would involve issuing up to 7.802 billion shares at a yet-to-be set price, the company said in a statement.
Kenya Electricity Generating Company, which is 70% state-owned, previously said it wanted to raise Ksh30 billion ($294 million) to finance expansion. Its share at the Nairobi Securities Exchange has gained as much as 33% and traded 16% higher at Ksh9.60, heading for its biggest gain in more than nine years.
KenGen reported profit of Ks11.5 billion in the year to 30th June from Ksh2.83 billion a year earlier, citing a tax credit and growth in its geothermal-power capacity. Revenue climbed 45% to Ksh26.2 billion.
KenGen has picked Standard Investment Bank and Renaissance Capital as advisers for the planned cash call, which is set to take place in the first quarter of 2016, Finance Director John Mudany said.
The government is expected to take up its rights, said Mr Mudany. The proceeds will fund a reorganisation of KenGen’s balance sheet, he added, while the company also plans to raise $1.7 billion in long-term debt.
According to Chief Executive Office Albert Mugo, the company currently has 1,611 MegaWatts of installed capacity and plans to increase that to 2,122 megawatts.
See also: KenGen set to develop a wind farm in Meru County
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