INVESTORS seeking to buy government stake in 26 state-owned companies approved for privatisation will be subjected to a competitive bidding process, Treasury Secretary Henry Rotich reassured on Friday.
He made the announcement Friday when the government concluded the sale of a 26 per cent stake or 24.96 million shares in Kenya Wines Agencies to South Africa's giant distiller Distell Group for Sh860 million. The deal was was gazetted on July 18.
The offloaded shareholding is part of the 72.65 per cent stake previously held by the government through the Industrial and Commercial Development Corporation.
Rotich ordered the Privatisation Commission - the authority overseeing the process- to immediately finalise sale of four per cent stake or 3.84 million shares as per the approval by Cabinet in 2012 and parliament in January 2013 at the same share price as that paid by Distell.
The remaining 42.65 per cent is set to be sold by January 2018 upon expiry of the five-year period within which KWAL is to be fully privatised.
KWAL deal is the first under the privatisation programme where the state is seeking to relinquish its holding in 26 companies mainly in sugar, hotel and banking industries.
Rotich said he expected the privatisation mode of five sugar millers- Chemelil (97.63 per cent stake), Sony(99.8 per cent), Nzoia (98.87 per cent)and the insolvent duo Muhoroni(17.2 per cent) and Miwani(49 per cent)- would "very soon" be approved by parliament after Cabinet's approval earlier in the year.
Under the proposed transaction framework, farmers will be given a 30 per cent stake in the millers with the remainder set for private investors.
"The process is quite rigorous - it has to go through Cabinet and parliamentary approval- because the(Privatisation) Act calls for a transparent transaction," he said after signing of the purchase agreement between Distell and ICDC. "That's why it has taken over five years to complete this sale."
Rotich however reassured that while sale of the State interest will be through an openly competitive process, the government will ensure local investors are allowed some ownership.
Privatisation Commission executive director Solomon Kitungu said the KWAL transaction was not subjected to a competitive process because of the 16-year distribution partnership where Distell supplies 70 per cent of KWAL products.
Kitungu said the Commission was presently undertaking a rationalisation and review process for the state-owned hotels.
Some of them include include Kabarnet Hotel, Mt Elgon Lodge ,Golf Hotel Kakamega,Sunset Hotel Kisumu and Kenya Safari Lodges and Hotels .
Banks include National Bank(70.55 per cent), Consolidated Bank (100 per cent) and Development Bank (89.3 per cent). Others are KenGen(70 per cent) and Kenya Pipleine(100 per cent).