Kenya Pipeline Company to be Listed on Nairobi Securities Exchange Later this Year

Strategic Insights -

President William Ruto's announcement on Wednesday reverses the government's earlier decision to strike off the company from the list of state agencies put under the privatization pipeline. The move is part of the government's efforts to continue reforming the capital markets and enhance their contribution to national development. Listing Kenya Pipeline Company at the Nairobi Securities Exchange (NSE) through an Initial Public Offer (IPO) will allow the public and private sector to buy shares in the agency, with the government expected to retain majority shareholding.

Key Takeaways:

  • President William Ruto announced the decision to list Kenya Pipeline Company at the London Stock Exchange (LSE) on Wednesday, reversing the government's earlier decision to strike off the company from the list of state agencies put under the privatization pipeline.
  • The government will retain majority shareholding in the company, similar to the likes of KenGen where the government holds a 70% share with private investors taking up 30%.
  • The listing at the NSE is expected to offer investors a unique opportunity to deploy capital in one of the country's most strategic infrastructure enterprises.
  • The government has been considering the privatization of Kenya Pipeline and Kenya Ports Authority, which are well-performing state corporations, alongside 26 poorly performing state corporations that have been targeted for sale to cut down government spending.
  • The sale of state-owned sugar factories, such as Chemelil Sugar Company and Muhoroni Sugar Company, has been placed under competitive leasing arrangements to enhance efficiency and restore profitability.
  • The government is seeking to boost the local capital market's ability to support development and help cut on debt reliance by listing top corporations such as Kenya Pipeline Company and Safaricom.

Statistics:

  • The government is expected to retain 70% shareholding in Kenya Pipeline Company, with private investors taking up 30%.
  • 26 poorly performing state corporations have been targeted for sale to cut down government spending.
  • The high court overturned the Privatisation Act 2023 on the grounds of unconstitutionality in September last year.
  • The Kenya Privatisation Act of 2005 provides the legal framework for privatizing public assets and operations, including State corporations.
  • The government has been considering the privatization of 27 state-owned corporations, including Kenya Pipeline and Kenya Ports Authority.

Sources:

  • President William Ruto's announcement on Wednesday
  • Energy and Petroleum Cabinet Secretary Opiyo Wandayi's speech in September last year
  • The High Court's decision to overturn the Privatisation Act 2023 in September last year
  • The Kenya Privatisation Act of 2005
  • Treasury CS John Mbadi's budget speech on June 12