KenGen Shares Plunge as Company Announces Biggest Rights Issue

  • Company stock falls by most since January following statement
  • Kenyan utility names Renaissance Capital transaction adviser

Shares of Kenya Electricity Generating Co. plunged by the most since January after the Nairobi-based company said it plans to raise 28.8 billion shillings ($286.3 million) in East Africa’s biggest-ever rights offer.

The state-owned company is offering 4.4 billion shares from May 23 to June 10 at 6.55 shillings apiece, it said in a newspaper statement. That’s an 18 percent discount compared with Monday’s closing price. The stock fell 8 percent to 7.35 shillings by 2:07 p.m. in the capital, Nairobi, paring its year-to-date gain to 3.5 percent.

KenGen, as company is known, initially announced in 2013 plans to raise $1.65 billion in a stock offer to existing shareholders. It has since reduced the amount to enable the government take up rights for its 70 percent stake.

The company is offering investors on its register by May 16 two shares for each held. The rights offer results will be announced on July 1 and trading of new shares will begin July 6. 

The transaction will be East Africa’s largest-ever rights offer and biggest equity capital raise in the region since Safaricom Ltd.’s IPO in 2008, Renaissance Capital, the transaction adviser, said in an e-mailed statement.

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