UAP Group's new shares yesterday started to trade at the over the counter market ahead of planned listing at the main securities market within 18 months.
The new UAP shares were on offer during the last quarter of 2012 and were oversubscribed by 130 per cent in an IPO in which the company wanted to raise Sh750 million through sale of 12.5 million new shares.
The offer raised Sh971.9 million with a total of 951 new investors. "This will give those people who did not have the opportunity to purchase the shares during the public offer a chance to buy the shares now," said UAP Holdings chairman Joseph Wanjui.
He added that the OTC trading will establish an efficient price discovery process for the firm's share before it is listed at the Nairobi Securities Exchange.
UAP which got a Sh4.7 billion boost last year from three private equity investors said the proceeds of the public offer will boost the kitty to fund expansion and launch of new projects.
At the OTC market, the UAP shares minimum order size has been set at 500 shares to be traded in multiples of 100 shares. Operators of the OTC market will be CFC Financial Services and Genghis Capital.
Speaking at the launch of the trading, Capital Markets Authority acting head Paul Muthaura said a framework to guide over the counter trading in bonds has also been prepared and submitted to the Ministry of Finance for approval. Muthaura said the guidelines are likely to be implemented within the current quarter.