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