Ken-Gen Opens Rights Issue to raise Sh.29B For Increased Power Generation.


The Kenya Electricity Generating Company has officially offered a total of 4,396,722,912 new ordinary shares at a discounted price of Sh. 6.55 per share in the Rights Issue that is geared towards raising Ksh. 29 billion for business expansion.

Speaking during the launch of the Central Kenya Region Rights Issue in Thika’s Blue Post Hotel on Tuesday, Ken-Gen Operations Director Eng. Richard Nderitu said the funds that will be raised will be used in number of energy generating projects for development such as commissioning an additional installed capacity of about 720MW mainly from affordable, clean and environmental friendly sources.

“With the country’s power demand expected to cross the 4,000MW mark by 2020. Success in the future is dependent on early planning and that is why we are asking shareholders to take up their rights at this time so that we can have enough capital for expansion,” said Eng. Nderitu.

Among the projects lined up is the drilling programme for 140MW Ol-karia VII, which is scheduled for delivery by 2020. The company expects to complete 25MW of early generation geothermal wellhead project by June 2016, bringing the total capacity on wellhead generation to 75MW.

Plans are also underway to begin 70MW Ol-karia 1 Unit 6 and complete upgrade of Ol-karia 1 Units 1, 2 and 3 to 50.7MW by 2017. The 140MW Ol-karia V and 80MW Meru Wind phase I are expected to come on stream in 2018 and have already attracted funding from development partners, including the French Development Agency (AFD).

Nderitu added that the offer would give shareholders an opportunity to reap more from the company, which has consistently posted impressive financial results, contribute to the growth of the company and reap more from our dividend scheme, which is one of the most competitive, reliable and sustainable in the country.

The Government, which is the principal shareholder, has taken up its full entitlement of rights, representing 70% of the transaction, through the conversion of some of the loans on-lent to Ken-Gen into equity (shares). 
The move by the Government, Nderitu said, was a vote of confidence in the company’s future and urged other shareholders to take full advantage of the offer and increase their investment in the company.

The Rights Issue comes 10 years after the company’s Initial Public Offering (IPO) in 2006, which at the time was the largest on the Nairobi Securities Exchange.

This particular Rights Issue closes on Friday June 10, 2016. Those shareholders who will not be able to take up their rights at this time were requested to transfer them to their close relatives otherwise they will be taken up by other Kenyans upon the expiry of this period.

“We expect them (shareholders) to take up all their rights but those who will not be able to do so will be free to transfer them to their close relatives. If they renounce these rights, other Kenyans will be able to take up those rights. After the closing date, those rights will go to the ramp for other investors to buy whatever is not taken by our shareholders,” said Nderitu.

Nderitu was impressed by the turn up of the shareholders arguing that it had surpassed their own expectations, something he said was a clear indication that the enthusiasm among Kenyans towards Ken-Gen.

He boasted of the good returns in the Ken-Gen investment and assured the shareholders that the company was quite a viable venture.

“As you can see Ken-Gen year in year out has been paying very very good dividends. That will continue and we assure our shareholders and other Kenyans that this a good investment to make,” he added.
Ken-Gen, which is Kenya’s leading energy generator with an installed capacity of 1,618MW compared to country’s current demand for energy of 1,560MW.

“The total installed capacity in the entire nation is 2,200MW, translating to a surplus of energy right now and therefore invite more industries to open up and take up that power so that by the time we bring up the additional power, we will be able to match supply and demand because when there is too much surplus, someone has to pay for it. So, when this is taken, this helps to reduce the tariff,” said Nderitu.

Abraham Serem, the Human Resource Manager and Admin Director of Ken-Gen said that the kind of feedback they received from the shareholders in this very first of a series of roadshows to be conducted countrywide, was very vital in the way the management of the company handled their affairs.
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