Nairobi, 10 May, 2016…The Capital Markets Authority has granted approval to the Kenya Electricity Generating Company (KenGen) to undertake a rights issue in which the electricity generator seeks to raise Kshs28.7 billion by issuing and listing 4,396,722,912 new ordinary shares. The rights will be issued on the basis of two new ordinary shares for every one existing share held by each shareholder on the register as at Friday 13 May, 2016.
According to KenGen’s information memorandum, the proceeds of the rights issue will be used partly to fund new geothermal and wind power projects so as to generate an addition 720 megawatts of electricity, up from 1,631 megawatts as at 30 June, 2015. The funds will also inject new equity into the Company, so as to create additional headroom that will enable it to access long-term loans at low interest rates, to facilitate its expansion.
KenGen noted in the information memorandum that the Government, the major shareholder with a 70 percent stake, will take up and pay for its full rights through the conversion of part of the on-lent loans to the company in the sum of Kshs20 billion.
“The Authority is satisfied that the disclosures therein comply with the requirements of Regulation 11 of the Capital Markets (Securities)(Public Offers, Listing and Disclosures) (Regulations) 2002, and contain the information that will enable investors to make an informed decision on the rights issue”, CMA noted in its statement. A minimum of 65 percent of the rights issue is required to be accepted to be declared successful.