Joseph Bonyo
22 April 2008
Nairobi — The mad rush of share applications for the Safaricom Initial Public Offering intensified yesterday, as a number of Kenyans thronged selling agents.
A spot check by the Nation at various selling points around Nairobi found long queues of retail investors keen on beating the deadline for the IPO. Similar queues were also witnessed in banks, as investors paid for their applications.
The offer, which opened on March 28, will close down tomorrow at exactly 3 p.m. By last Friday, approximately 1.85 million retail investors had expressed interest in owning a slice of the region's leading mobile phone company. The government expected one million new investors in the Nairobi Stock Exchange (NSE), courtesy of the offer.
Applicants for the shares will get to know their stake in the company, when the allotment are published at the end of May. The shares will be listed for trading at the NSE from June 9.
In the offer, the government is selling 25 per cent of its 60 per cent shares it owns in the company. The other 40 per cent stake belongs to Vodafone Plc, a UK-based group.
Treasury is seeking to raise Sh10 billion from the partial sale of the company to local and international investors. Shares are selling at a discounted price of Sh5, with a minimum of 2,000 units on offer.
Proceeds from the process should fund various development projects by the government in the current financial year.
Safaricom Limited has been described as the most profitable firm in the region, recording Sh17.2 billion in profits last year.
The privatisation of the company did not, however, come easy, meeting a number of obstacles largely focusing on its ownership.
Legal redress
At one point, the Orange Democratic Movement party sought legal redress in the High Court in a bid to stop the planed sale.
The sale will also go down in history as having attracted the largest number of commercial banks offering loans to would-be shareholders. Some of the banks are offering up to 100 per cent financing for the offer.
Another first is that applications for the offer are also being received via the Internet. Transaction advisors, led by Citi consortium, said this was intended to reduce on the time spent applying manually.
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