Mr Titus Mbathi (left) and Mr Musa Ndeto. FILE
By Victor Juma,
In Summary
- Board head Titus Mbathi and directors Musa Ndeto and Mary Michieka retire as firm plans first rights issue.
KenGen
has announced a board shake-up with the exit of its chair as the power
generator this morning informs investors of the first rights issue since
listing and the potential sale of a significant stake to a strategic
investor.
The firm is seeking shareholder approval to create
7.78 billion shares of which up to 2.21 billion will be offered to its
owners for a multi-billion shilling fund raising that could further cut
the stake of the government in the utility.
The 2.21 billion shares worth Sh35.1 billion will
be set for the rights issue and are equivalent to its entire issued
stock at the Nairobi Securities Exchange (NSE).
KenGen did not explain how it intends to use the
remaining 5.56 billion shares, but the firm earlier talked of plans to
sell stakes to equity investors as it races to raise Sh467 billion ($5.5
billion) in debt and equity between now and 2018 to finance plans to
double generating capacity.
The firm also informed shareholders that its
chairman, Titus Mbathi, and directors Musa Ndeto and Mary Michieka were
quitting; deepening the board changes that begun with retirement of its
CEO Eddy Njoroge.
The appointment of new officials at
Treasury and energy ministry after the March 4 Election has also ushered
in Henry Rotich, the Treasury secretary and Joseph Njoroge, the PS in
the energy ministry to KenGen’s board.
Mr Mbathi, 85, Mr Ndeto, 61 and Ms Michieka, 67, were some of the firm’s longest serving directors.
“That the authorised share capital of the company
be and is hereby increased … by the creation of 7,784,072,472 new
ordinary shares ranking pari passu in all respects with the existing
ordinary shares in the capital of the company,” says KenGen in a notice
that will appear in the press Friday.
Simon Ngure, KenGen’s acting managing director,
said earlier the electricity producer plans to generate additional 2,500
megawatts in the next four years and the firm needs Sh467 billion
“The money will come from a split of equity and debt. We will maintain equity to debt ratio of 30:70,” said Mr Ngure.
This means that Sh327 billion will be raised from
commercial banks and development finance institutions and the remaining
Sh140 billion will come from a rights issue, joint ventures and sale of
shares to strategic investors.
If the new shares are offered to strategic
investors, it will dilute the State ownership in the firm and could make
the firm a private entity should the government holding falls below 50
per cent.
“The government intends to defend its position in
KenGen, but a final decision on the state’s next move will be made by
the cabinet,” Davis Chirchir, the energy cabinet secretary told the Business Daily in an interview without giving details.
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