News

Written by Albert Muriuki

Winners of the bids for the provision of advisory services for mobile service provider Safaricom’s initial public offering are expected to sign contracts with Treasury this morning.

This follows the expiry of the 14 day period allowed for losing bidders to lodge complaints. The winners received notices from the Treasury on August 28 meaning the 14 day period ended yesterday.

No loser filed a petition despite earlier indications that there would be complaints over the award of the tender for lead transaction and lead broker services as well as from the legal advisory segment. Safaricom IPO is set to generate Sh750 million in placement fees and going by past IPOs, the lead broker which tends to get a sizeable fraction of the fee was expected to be hotly contested.

The IPO, the largest ever in Eastern Africa, had been marred by intrigues ranging from political grand standing to irregular opening of bids, but all that appears to have fizzled out clearing the way for the sale to proceed as planned.

The Government hopes to get Sh33 billion from sale of 25 per cent shares of Safaricom. Part of the money should help the Government bridge the Sh109 billion deficit in this year’s budget. Besides Safaricom, the government is targeting to raise Sh5.6 billion from the sale of a 51 per cent stake of Telkom Kenya to a strategic partner.

Depending on the firm’s return to profitability, Treasury hopes to cede additional 19 per cent stake and the strategic partner an 11 per cent stake in the national operator for sale to the public through an IPO.

A bidders conference for the strategic investors was held last month.

The sale of a further 19 per cent stake in KenGen is also factored in to raise Sh2.5 billion after it was suspended in May after Mr Amos Kimunya, Finance Minister said the market price was not conducive to such a sale. Since then the KenGen share price has risen from Sh17 per share to Sh31 per share and is projected to shift ground depending on the company’s annual results expected later this month.