Africa-Press – Kenya. Finance committee chairman Kuria Kimani The Kenya Association of Stockbrokers and Investment Banks has backed the government’s plan to sell a portion of its Safaricom PLC shares.
The proposal also got support from Fund Managers Association (FMA).
The two agencies were appearing before the joint committee of the National Assembly, which is collecting stakeholders’ views on the proposed sale of shares.
The government is intending to offload up to 15 per cent of its 35 per cent controlling shares at the telco.
Already, it has identified a South Africa-based company, Vodacom, as the strategic partner.
According to Treasury CS the intended sale is expected to give the state Sh204 billion, which will be ring-fenced for commercially viable infrastructure projects.
Appearing before the committee jointly chaired by Kuria Kimani (Finance) and Shurie Abdi (Balambala), the two associations said they are ready to support the process, which they noted will deliver maximum benefits to the Kenyan people.
“We support both the divestiture decision and the proposed valuation. Kasib stands ready to support the government in executing these recommendations ensuring that this landmark transaction delivers maximum benefit to the Kenyan people while protecting national interests,” the association said in its submission to the joint committee.
They also recommended increasing the total divestiture to 20 per cent of government shareholding with the additional five per cent offered to the public through the National Securities Exchange.
“We recommend completing the strategic sale to Vodacom first, then launching the public offering of an additional five per cent through the NSE with reserved allocations for retail investors, priority for Kenyan citizens and institutions, employee ownership programmes, pension fund participation and a transparent book-building process,” they said in the submission.
“This approach delivers about Sh312 billion total while achieving multiple policy objectives.”
They also demanded that Vodacom commit to maintaining Safaricom as a listed company with no compulsory acquisition of the minority shareholders.
“We request acceleration of other planned privatisations and IPOs. We also call for enhanced regulatory oversight to protect national interests,” the association submitted.
The submission was made jointly by CEO Willie Njoroge (Kasib) and FMA chief executive officer Fred Mburu.
They argue the proposed price of Sh34 per share is fair because it includes a strategic premium above current market rates.
Furthermore, the groups urge the government to maintain veto rights over major corporate decisions to protect national interests.
“The new majority shareholder should be encouraged to maintain minimum capital investment levels, maintain employment levels, continue support for social impact programs such as M-Pesa Foundation and Safaricom Foundation, and retain headquarters and key operations in Kenya,” the two agencies said in their joint submission.
“The agreement should include sunset clauses allowing the government to buy back shares if conditions are breached and provide first right of refusal if Vodacom seeks to sell its stake.”
The committee, sitting in Nairobi, will continue receiving stakeholders views up to Wednesday then move to 27 counties to collect public views on the sale.
Today, the committee will be meeting Safaricom CEO Peter Ndegwa on the company’s view on the proposed sale.
