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Kenya: Safaricom Sale Opens on Friday
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The Nation (Nairobi)
27 March 2008
Posted to the web 26 March 2008
Joseph Bonyo and Wachira Kang'aru
Nairobi
The sale of Safaricom shares to the public will go on as planned, Government officials said Wednesday, dismissing calls to suspend the Initial Public Offer, pending clarification on a number of issues.
Speaking at different functions, Finance minister Amos Kimunya, Investment Secretary Esther Koimett, and the Privatisation Commission urged the public to prepare for the offer which opens Friday.
The Government is set to sell 25 per cent of its shares in Safaricom Limited, the most profitable company in East and Central Africa.
"Transaction will proceed. We are scheduled to open on Friday and it will continue as per the time set out in the prospectus," said Ms Koimett at a press conference in Nairobi.
On Tuesday, two MPs had proposed that the offer be delayed to establish the true owners of Mobitelea, a company that owns a stake in Safaricom.
They also sought clarification on the share pricing saying the Sh5 per share undervalued the company.
The sale is expected to raise Sh50 billion to finance various development programmes across the country.
Mr Kimunya was confident that the public's participation in the offer would be overwhelming since it was long overdue.
"Kenyans have been waiting for this offer for too long. Some have been saving money ever since we announced the intentions to list this company. It is only fair that we give them that chance," Mr Kimunya told journalists, after opening the 2008 sector hearings on 2008/2009 financial year budget.
The other officials, including Ms Koimett, were briefing the media on the level of preparedness at Citi Bank offices in Nairobi.
Speaking at the Citi Bank meeting, Morgan Stanley, the international company that advised the Government on pricing, bank vice president, Nina Weiden, urged those concerned not to look at the unit price (Sh5) but rather the total IPO valuation amount when making comparisons.
"We could have arrived at any price that we wanted by increasing or reducing the number of shares on offer," she said.
MPs had also raised issues concerning the participation of Dyer and Blair Investment Bank as a transactional advisor in the offer. This, they said, amounted to a conflict of interest.
"Valuation has come from Morgan Stanley," said Ms Weiden. "We realised from the onset that we needed to separate valuation from brokerage and that is why we agreed that Morgan, and not Dyer and Blair, who will be selling the shares to the public, carry out valuation."
On the ownership of Mobitelea, Mr Kimunya said it would not warrant the delaying of the IPO since the Government was only off loading part of its 60 per cent shares. Mobitelea is alleged to own five of the 40 per cent shares held by Vodafone Plc in Safaricom.
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