State Says Safaricom’s IPO Plan in Doubt Over Chaos in Kenya
The Government has expressed doubts over the success of the planned Safaricom Initial Public Offer (IPO), but maintains the process will go on despite the stormy political environment. Finance minister, Amos Kimunya, said logistics are still being sorted out before he releases a timetable detailing among other things the IPO's pricing. "We are still on track. We should be giving you the dates very soon," he said.
"But we still believe Kenyans are still keen in buying the shares," said Kimunya.
The Government's 25 per cent sale of its 60 per cent shareholding in Safaricom has met several frustrations including a suit filed by the opposition party, ODM, requiring it to be nullified until a privatisation commission was set up.
The Association of Kenya Stockbrokers, the Nairobi Stock Exchange (NSE) and Investment banks also joined ranks demanding the process be postponed to this year, at least to give local investors a chance to buy into the company.
However, as the minister exudes confidence on the IPO, the political crisis that has severely tore into Kenya's social fabric sets no suitable platform for major investments in the country.
The Government's sentiments over the timing of the IPO, which is expected to net in an estimated Sh35 billion to the Exchequer, concur with those of the NSE and Dyer and Blair Investment Bank, the transaction's lead advisors.
The exact date when the process is supposed to start has become a worrying issue to all the stakeholders.
"Safaricom is a very important IPO, and its timing must be right and correct," said Mr Jimnah Mbaru, the chairman of NSE and Dyer and Blair Investment Bank.
"We have gone back to the drawing board to sort out some few details," he said.
However, involved parties are unable to make tangible commitments as to when the stalled transaction would be re-started owing to the volatile political situation that has sparked jitters in capital markets, as investors wear a 'wait and see' attitude.
The East African Standard