14 March 2008

Kenya: Safaricom IPO Date, Price Set

Nairobi — The much-awaited Safaricom Initial Public Offer will be open to the public on March 28, Finance Minister Amos Kimunya has said. The government will offload its 25 percent stake in the mobile phone service provider at Ksh 5 per share for the 10 billion shares available.

"What I expect out of this transaction is that we will be generating at the very least Ksh billion," Kimunya told a news conference.

He said there would be a slightly different pricing structure for local and foreign investors. The company is jointly owned by the government at 60 percent and Britain's Vodafone, 40 percent.

The IPO, touted as the biggest in the market, was delayed last year because of elections.

Kimunya said he was optimistic the IPO will open up the market for more investors despite the credibility crisis facing the Nairobi Stock Exchange. Two brokerage firms, Francis Thuo and Nyaga stockbrokers, have been put under statutory management denting investor confidence.

Safaricom posted a pre-tax profit of Ksh 17.19 billion in 2007, making it the most profitable firm in East Africa.

Public interest in owning stocks has risen in recent years, with many of the initial public offerings on the bourse since 2003 having been highly oversubscribed. Analysts and brokers have said they expect the Safaricom IPO to be heavily oversubscribed.

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