Safaricom IPO gets green light
14 March 2008
The government of Kenya has announced the terms of its long-awaited IPO for Safaricom, the country's largest mobile operator.
The offer is KES5 (Eur0.05) per share for 25 per cent of the company, which values Safaricom at just over $3bn ($1.95bn).
According to local press reports, 35 per cent of the 10 billion shares on offer are to be reserved for foreign institutional investors. This percentage is not set in stone, however, as it will be reduced if the amount offered to local investors is oversubscribed by 200 per cent.
Kenya's finance minister, Amos Kimunya, told reporters at a news conference that he expected the government to raise "at least KES50bn" through the Safaricom IPO.
The offer is open to the public through March 2008 and scheduled to close on April 23. The flotation itself is planned for June 9.
A Safaricom IPO was initially scheduled for January this year but was postponed due to the outbreak of tribal violence following the disputed presidential election results in December 2007, which saw Mwai Kibaki resume his post.
Before the post-election violence, Kenya had gained a reputation as a beacon of economic and political stability in East Africa. The Kenyan government is clearly hoping that it can go some way to reclaiming that reputation if it can successfully pull off what will be the most valuable IPO ever held in the region.
The Kenyan government presently owns 60 per cent of Safaricom with Vodafone Kenya, a subsidiary of Vodafone, holding the remainder.
Safaricom is estimated to hold around a 75 per cent market share of Kenya's 9.5 million mobile subscribers. Mobile penetration in Kenya is now approaching 30 per cent.
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