KenGen new shares commence trading at the NSE

By Correspondent

Kenya Electricity Generating Company’s new shares began trading on the Nairobi Securities Exchange (NSE) following a successful rights issue that posted a 92 per cent subscription.

The listed power generator raised Sh26.4 billion in the largest rights issue ever undertaken at the Nairobi bourse.

The company offered 4.4 billion new shares at Ksh6.55 each to existing shareholders at a ratio of two for each share held to raise the targeted amount. About 58.2 per cent of the offer was taken up under additional shares and rump. All applicants have received 100 per cent of the new shares applied for.

Speaking during the bell ringing ceremony to kick off the trading of the new shares, Kengen’s Albert Mugo attributed the success of the offer to the high level of confidence investors have in the company.

“Investors bought the new shares based on the confidence they have in KenGen to successfully deliver on planned projects and spur the company to profitability.  The prospects are brighter especially with increased investment in geothermal and other green energy sources, which is the core of our strategy,” he said.

KenGen has lined up a number of projects for implementation totaling about 700MW, of which 605MW is geothermal.

The 140MW Olkaria V, 70MW Olkaria I unit 6 and Meru Wind phase 1 (80MW) are expected to come on stream in 2018 and have attracted funding from development partners.

Energy and Petroleum Principal Secretary, Joseph Njoroge, said the government was keen on modernizing its energy system by adding renewable capacity.

Njoroge cited the move by the Energy Regulatory Commission (ERC) last year to suspend the licensing on new diesel-fired plants and the promotion of feed-in-tariffs policy on wind, solar, geothermal and biomass as some of the policies aimed at accelerating green energy development.

“The current focus on environmental friendly energy technologies to generate energy for industrial and domestic use will improve the affordability of energy, and also increase energy security by reducing the reliance on oil-based energy sources,” he said.

National Treasury Cabinet Secretary, Henry Rotich, who was represented by Dr. Esther Koimett, the Director General of Public Investments and Portfolio Management,  noted the uncertain macroeconomic and market dynamics which have resulted in a bear run at the NSE in recent times and urged investors to focus on the capital markets’ long term positives.

“Our capital markets continue to attract a diverse range of players and activities. These will, no doubt, add to the vibrancy of our exchange landscape. As our markets develop, we must continue to safeguard this reputation of integrity, trust and resilience,” he said.

Nairobi Securities Exchange, Chief executive, Geoffrey Odundo congratulated KenGen for continuously using Kenya’s Capital Markets to strengthen its capital base and fund its expansion strategy.

Odundo also noted that it is inspiring to witness the success of the KenGen rights issue which is targeted at enhancing the power generation capacity of this country. He further observed that retail investors have been given an opportunity through the NSE to contribute towards the development of their country.

“It is a widely accepted fact that the best source of development is that fuelled by domestic led growth. It is our hope that listed companies and the government will continue to look to the bourse as a ready and capable partner in raising capital to fund development,’’ he said.

NSE Chairman, Sam Kimani during his remarks observed that KenGen rights issue raised a record Sh 26.4 billion, a 92 percent subscription rate, in the largest rights issue ever undertaken at the Exchange.

“The success of this Rights Issue is a testament of the faith that investors have in KenGen and its future strategic direction.

Investors will always go out of their way to support a company whose values are embedded on the future of our nation. The extra megawatts which will arise from this issuance will go towards supporting our homes, industries and creating more job opportunities for our people,’’ he said