Kenya mulls Sh103.2Bn dual-listing of National Oil Corp in 2 years

The government plans to raise up to Sh103billion by listing its state corporation, National Oil at the Nairobi Securities Exchange (NSE) and on the London Stock Exchange (LSE) as early as 2019, by buying a share of two oil blocks, 13T and 10BB in Turkana County.

The two oil blocks are owned by Tullow Oil, Africa Oil and A.P. Moeller Maersk.

“We need to raise money for our back-in rights,” said Andrew Kamau, Principal Secretary for petroleum at the Ministry of Energy, Wednesday.

A dual-listed company or DLC is a corporate structure in which two corporations function as a single operating business through a legal equalization agreement, but retain separate legal identities and stock exchange listings. Virtually all DLCs are cross-border, and have tax advantages for the corporations and their stockholders.

The government had in May this year signed an MOU with the London Stock Exchange to allow energy companies to cross list and raise funds. The government, through the procedure, however plans to maintain a majority stake in the oil company but will open it up to investors in a quest to raise capital.

The move is expected to see investors get a chance to acquire shares in the state corporation through an initial public offer (IPO), in which the state will use the instrument to raise cash to fund activities in the nascent oil industry.

Upon its successful application, the National Oil will join utility firms Kenya Power and KenGen which are majority owned by the government but listed on the NSE.