Business / News
Wednesday, 06 Jul 2016 18:57 EATswaithera@kenyafreepress.com
Kenya Electricity Generating Company’s (KenGen) new shares began trading on the Nairobi Securities Exchange (NSE) following a successful rights issue, which 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 Sh6.55 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 MD and CEO 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.
Kenya’s renewable energy development received a major boost after the KenGen signed a Memorandum of Understanding (MoU) with the French Development Agency (AFD) underpinning funding of up to Sh6.9 billion (60 million Euros) by the French Government for the development of the 80 MW Meru wind project. 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.
“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,” Energy and Petroleum Principal Secretary Joseph Njoroge said. National Treasury Cabinet Secretary, Henry Rotich, who was represented by 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.
Speaking during the event, Nairobi Securities Exchange CEO Geoffrey Odundo congratulated KenGen for continuously using the capital markets to strengthen its capital base and fund its expansion strategy. Mr Odundo observed that retail investors have been given an opportunity through the NSE to contribute towards the development of their country. NSE Chairman Sam Kimani said that KenGen rights issue was the largest rights issue ever undertaken at the Exchange.
Waithera is a staff writer at the Kenya Free Press.