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Ruto sets September deadline for KPC listing
President William Ruto, Defence Cabinet Secretary (CS) Soipan Tuya (left) , Treasury CS John Mbadi (second left) and Chairperson Nairobi Securities Exchange (NSE) Kiprono Kittony (right) arrive for the bell-ringing to celebrate the listing of the Linzi Asset-Backed Security, the first of its kind in Kenya at Nairobi Securities Exchange, Nairobi.
The government will sell part of its stake in Kenya Pipeline Company (KPC) and list the firm on the Nairobi Securities Exchange (NSE) before September this year, President William Ruto said.
Dr Ruto on Wednesday said the structuring of the initial public offering (IPO) was being finalised by the Privatisation Commission before being presented to the Cabinet for approval.
In an IPO, a company raises additional capital from new investors and part of its shares are made available for trading on the exchange.
The Privatisation Commission is expected to structure the details of the IPO which include the pricing of the offer.
Listing of KPC will mark the first privatisation of a government entity through the securities exchange in 17 years, the last being Safaricom’s IPO in 2008.
“We are implementing a structured time bound divestiture programme starting with the listing of the KPC,” Dr Ruto said on Wednesday during the listing of the bond backed by the Talanta stadium.
“I expect the Cabinet to grant approval to this IPO shortly, the privatisation commission is working on the final approval and by September we will have that listing,” he said at the event held at the NSE on Wednesday.
He said the National Treasury was also developing a minimum disclosure and listing framework for all public entities in order to prepare them for privatisation.
“We are raising the bar to require public entities to begin disclosing standardised financial and operational data in line with capital market standards,” he said.
He noted that public entities that made such disclosures would be required to list at least 20 percent of their shares at the NSE within a year.
KPC listing is expected to excite the market owing to its asset base of Sh120 billion and profitability. The petroleum distributor reported a profit after tax of Sh6.86 billion for the year ended June 2024 up from Sh4.5 billion a year earlier.
The company, which has 18,173,300 shares that are held by the National Treasury 99.9 percent and 0.1 percent by the Ministry of Petroleum and Mining, had earnings per share of Sh378. It paid a dividend of Sh7 billion to the National Treasury for the year ended June 2024.
KPC had a net book value of Sh83.3 billion with pipeline pumps and tanks being its prime assets valued at Sh58.2 billion in the period.
KPC’s installed system consists of 1,342 kilometres of pipeline with current capacity to handle about 14 billion litres of petroleum products.
KPC has been diversifying its operations in order to increase its revenue streams. It is in the process of establishing a liquefied petroleum gas facility in Mombasa as well as laying fiber optic in support of the government digital superhighway agenda.
“Plans are already underway to further develop this business portfolio, with the aim of enhancing revenue streams in the coming years,” said KPC in its latest annual report.
Government entities that have been partly privatised through listings include Kenya Commercial Bank in 1988, national air carrier Kenya Airways, power generating company Kengen, Kenya Re-Insurance Corporation and Safaricom.
