Kenyans can now buy KPC shares from Ksh.900 in historic public offer

Kenyans can now buy a stake in the Kenya Pipeline Company (KPC) for as little as Ksh.900, in a move aimed at widening public participation in the capital markets.

According to the information memorandum, shares will be priced at Ksh.9 each, with a minimum purchase of 100 shares per investor.

The offer is expected to draw at least two million Kenyans into the capital market, marking one of the broadest public ownership drives in recent years.

The government’s move to sell off a 65 per cent stake in the company, or an equivalent of 11.8 billion shares, is set to provide an investment opportunity to at least two million retail investors.

According to KPC, Kenyans can now take part in owning the company while at the same time helping the government to raise non-tax revenue, deepen the capital markets and unlock the company’s full potential.

“The company is telling us, and we are already past H1, that the expectation of net profit is around Ksh.9.6 to Ksh.9.7 billion, just below Ksh.10 billion. If I look at that and the dividend policy that has been set at 50 per cent, I can already project expectations around dividends, which is Ksh.5 billion for investors. You can already estimate your dividend yield, which is around three per cent,” said transaction advisor Dr Kenne Belgrad.

Kenyans can buy shares through a fully digitised e-IPO process designed to make participation faster, easier and more accessible, including via USSD by dialling 483816#, a quick and convenient channel that prompts investors to pay using M-Pesa.

Investors can also apply and pay electronically, eliminating paperwork, long queues and manual errors associated with past offers. Investors have further been assured of the company’s solid financial health.

“There were some restrictions on capex, on some spending, because when you are listed for privatisation without the express approval of the CS, you may not do much. So we are sitting on Ksh.16.2 billion in cash and pretty much no debt, because the Ksh.3.3 billion liability that you see being reported in the accounts as borrowed funds is pretty much short-term,” Dr Belgrad stated.

KPC management has expressed optimism that the privatisation of the firm will unlock more value by enhancing its efficiency.

According to KPC managing director Joe Sang, the privatisation will allow KPC to go to the market on time, taking advantage of viable opportunities and cutting back on unnecessary delays.

“Pipeline, if you need something to be approved, first you do it as ESCO, you take it to the committee of the board, it goes to the full board, and then you write to your parent ministry to consider it. The parent ministry will stay with it for one or two months, then write to the National Treasury. So a process that should ideally take two to three days takes three months,” KPC CEO Joe Sang stated.

Dr Belgrad added, “We are excited to see you out of the PFM, out of the PBTA, out of SRC, out of the Cabinet memo, out of the budget. We strongly believe that behind you, you will actually grow perhaps stronger and higher.”

Kenyans have been urged to take advantage of the open window, which will close on February 19, before trading begins later in March. The government hopes to raise Ksh.103 billion from the divestiture.