Mergers, Acquisitions and Financial Results

Internet service provider AccessKenya has announced successful completion of its initial public offering (IPO), which it says was significantly oversubscribed. The firm said it would announce the exact amount of oversubscription and details of allocations on May 24 once all applications and payments have been fully reconciled.

"Our processing of applications and reconciliation is proceeding very efficiently and we will definitely be in a position to make our definitive announcement on May 24, if not before," said AccessKenya managing director Jonathan Somen. He said the company was on track to make refunds by the end of May to ensure that investors' funds are not held for more than one month. Shares in the AccessKenya Group are expected to start trading on the Nairobi Stock Exchange on June 4.

AccessKenya Group also owns Blue, one of Kenya's largest public data network operators. AccessKenya offered 80 million shares at a price of Sh10 a share and retail investors had to apply for a minimum of 5,000 shares.

The firm, launched its share offer yesterday with a bold pledge to transform itself into an alternative telephone solutions company, competing against Telkom, Celtel and Safaricom. Speaking during the launch of the Initial Public Offer at the Norfolk hotel, AccessKenya's chief executive officer, David Somen had previously said the firm intended to raise capital for long term investments in the project. The bulk of the capital will go into buying an information technology (IT) firm to expand into IT-related services.

The firm intends to raise Sh800 million through the sale of shares, with the difference of Sh300 million to be shared by the CEO, his brother Jonathan and their father Michael Somen, who is the chairman of the family-owned firm.

AccessKenya had experienced strong growth in its core business as an internet service provider (ISP), and its expansion in scope and scale needed more capital. "We have been talking to several IT firms, and after the IPO we shall finalise talks with one of them," the CEO had said at the launch of the IPO.

Somen had also noted that they had to balance between the retail and high net investors, and the institutional investors, to set the higher minimum of Sh50,000 that is needed to buy the minimum 5,000 shares on offer. Each share will cost Sh10.

Other plans are to expand the sales team to grow the firm's core business.

"The first thing that we will do after the IPO is to accelerate growth in our core corporate internet sector, by increasing the size of our sales team," Somen said.

The Nation