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Sh3 billion windfall for advisers in KPC stake sale
From left: Kenya Pipeline Company Managing Director Joe Sang, Public Investments and Portfolio Management Director General Lawrence Kibet, Image Registrars CEO Abdulhaleem Mohamed, Privatization Authority Managing Director and CEO Dr Janerose Omondi and Faida Investment Bank Lead Transaction Advisor Dr Belgrad Kenne during the Kenya Pipeline Company initial public offering (IPO) media roundtable at Sarova Stanley Hotel, Nairobi on January 20, 2026.
Transaction advisers and other agencies facilitating the ongoing Kenya Pipeline Company (KPC) initial public offering (IPO) are in line for a Sh3 billion fees windfall, highlighting the lucrative payday accruing to intermediaries who arrange large capital market deals.
The fees, to be paid from the government’s gross proceeds of Sh106.31 billion from the sale of a 65 percent stake in KPC, will be shared among a variety of firms, including receiving banks, stockbrokers, investment banks and a shares registrar.
Others are law firms, a reporting accountant, advertising and public relations agencies. The offeror will also pay listing and approval fees to the Nairobi Securities Exchange (NSE) and the Capital Markets Authority (CMA) respectively.
For the KPC offer, the fees are equivalent to 2.8 percent of the IPO’s targeted amount of Sh106.31 billion. In the previous large State IPOs such as Safaricom and KenGen, issuance fees were between four and five percent of the proceeds.
The government is seeking to offload 11.81 billion KPC shares at a price of Sh9 per unit through the public offer. The IPO opened on Monday, and will close on February 19, 2026.
Disclosures in the IPO’s information memorandum show that stockbrokers and investment banks will take the bulk of the fees at Sh1.59 billion —in placement fees for processing the expected applications from thousands of their clients in their role as selling agents.
The fees paid per broker depend on the value of IPO shares they process, with the cumulative total capped by law at 1.5 percent of the offer size.
The issuer has enlisted 22 intermediaries to handle the sale, including Faida Investment Bank as the lead transaction adviser, Dyer and Blair Investment Bank as the lead sponsoring broker and Francis Drummond as co-sponsoring broker.
On top of its share of placement fees, Faida is being paid Sh98.6 million for leading the transaction, and will also be in line for more millions via a provision for a success fee of one percent plus 16 percent VAT on gross proceeds of funds raised in the IPO.
A success fee is a performance-based commission paid out to an underwriter or adviser upon the successful closing of a deal, incentivising them to market the transaction.
Dyer & Blair and Francis Drummond will meanwhile share Sh2.75 million as the sponsoring brokers, the disclosures show.
Image Registrars, which is acting as the data processing agent and registrar of the offer, is being paid a total of Sh70.35 million, of which Sh28.3 million is advisory fees and Sh42.05 million is reimbursable costs.
The offer has enlisted three receiving banks, which will be paid Sh16.35 million. The Co-operative Bank of Kenya will earn Sh9.96 million, KCB Bank Limited Sh3.6 million and Stanbic Bank Sh2.78 million.
The transaction’s legal advisers TripleOKLaw Advocates and G&A Advocates LLP will receive a fee of Sh31.9 million, while PriceWaterhouseCoopers LLP will be paid Sh13.45 million as the reporting accountants for the IPO.
The government has also tapped Apex Communications and Belva Digital as the public relations and advertising agencies at fees of Sh42.13 million and Sh12.26 million respectively.
For the offer, the Treasury is spending Sh40 million in advertising fees, Sh6.25 million in printing costs and Sh12.5 million as other fees. It is also paying the CMA Sh30 million in IPO approval fees, and the NSE Sh1.5 million in listing fees, both being the maximum allowed as per the CMA’s listing and public offers rules.
The IPO fees windfall marks a continuation of a good earnings run for transaction advisers in the capital markets, coming from recent large-ticket debt and equity transactions.
In December, South Africa’s Vodacom Group disclosed that the advisers in its Sh272.4 billion purchase of an extra 20 percent stake in Safaricom from the Treasury and its British parent Vodafone Group will earn up to Sh2.3 billion in fees.
The company put the transaction costs at between 200 million rands (Sh1.56 billion) and 300 million rands (Sh2.35 billion), the bulk of it covering brokerage fees and stamp duty charges.
Vodacom named Stanbic Bank and its investment banking subsidiary SBG Securities among the advisers in the deal, alongside law firms CDH Kenya (Cliffe Dekker Hofmeyr) and CMS Kenya.
Still in December, British multinational Diageo announced it will sell its 65 percent stake in EABL and 53.68 percent holding in spirits firm UDV Kenya to Japan’s Asahi Holdings for a total consideration of Sh386.9 billion, signalling more transaction fee windfalls for advisers.
Other large deals last year were the Sh44.8 billion Linzi Finco infrastructure bond and the Sh20 billion Safaricom and Sh16.78 billion EABL corporate bond sales.
