South Africa’s pension fund Public
Investment Corporation (PIC) has raised its stake in KenGen to 6.62 per
cent following the purchase of an additional 85.1 million shares,
signalling its confidence in the power producer’s prospects.
The
fund, which is set to be allotted 351.2 million KenGen shares
equivalent to 5.33 per cent equity, recently purchased the 85.1 million
shares amounting to a 1.29 per cent stake in the open market.
PIC
has been buying KenGen shares in batches; it first it purchased 72.9
million units and followed it up with 12.2 million units earlier this
month.
“With the additional shares bought from the
market, PIC’s total holding on allotment, assuming all else equal would
be 436.3 million shares equivalent to 6.62 per cent shareholding,” the
Nairobi Securities Exchange-listed firm said in a statement.
Second largest shareholder
The
South African fund will rise to become the second largest shareholder
of KenGen after the National Treasury whose stake will stand at 70 per
cent after being diluted 5.3 per cent alongside other investors in the
recent rights issue.
The government’s ownership rose to 73.92 per cent after
a section of shareholders declined to take up 351.2 million shares in
the cash call, with a decision subsequently made to sell the shares to
PIC for Sh2.3 billion.
The transaction will see the
company hit the target of raising a total of Sh28.7 billion, having
netted Sh26.4 billion in the cash call.
KenGen is raising cash to boost its financial position at a time when it has lined up more capital-intensive power projects.
The
company says the projects will cost nearly $1 billion (Sh103 billion)
in aggregate, with various funding options including debt and joint
ventures being considered to raise the large sum.
The
investment in KenGen underlines PIC’s strategy of diversifying outside
South Africa where it is one of the biggest investors in publicly traded
firms.
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