KenGen nets Sh26.4 billion from shareholders
The Kenya Electricity Generation Company, KenGen, has raised Sh26.4 billion from selling new shares to existing shareholders.
The power producer however fell short of its Sh28.7 billion target for the rights issue, representing a subscription rate of 92 percent.
KenGen created 4.3 billion new shares which it sold for Sh6.55 during the rights issue, as it sought to raise funds to finance its capital intensive projects.
The government, through the National Treasury is the majority shareholder in KenGen with a 70 percent stake and committed to take up its rights in full. This saw the government pump in Sh20 billion into the firm by converting part of the Sh41 billion debt owed to it into equity.
Analysts estimate that by government converting part of its debt, KenGen will lower its financing costs by 15 percent to Sh2.5 billion.
This left the power producer with quest of only raising Sh8.7 billion, but managed to raise Sh6.4 billion from other shareholders.
KenGen has an installed capacity of 1,611 MW, which it plans to increase to 2,122 MW by 2018 at a cost of $1.75 billion.
Projects lined up by the power producer include three new 350 MW Olkaria geothermal projects, a 400 MW wind farm in Meru as well as rehabilitation of its Olkaria 1 plant.
The new shares will be listed and start trading on the Nairobi Securities Exchange (NSE) on July 6.
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