Kenya's Finance Minister Amos Kimunya, speaking on arrival from Yokohama, Japan, announced the sale of Safaricom's 25% shares which had been grossly over-subscribed by 532%, a figure the authorities said had never been raised within such a short time.
The ownership structure of Kenya's blue chip, Safaricom, is expected to favour foreigners on a larger scale, in addition to its British owners, Vodafone, and a secret shareholder, Mobitelea, which is registered in the English Channel, a tax haven.
Kimunya defended the sale of the firm to mainly foreign fund managers, saying it was meant to open up Kenya's financial sector to the international market.
"We structured the investment to show the international market that we are ready for business. Let nobody have the impression we threw it away. It is about different misunderstandings of the transaction," Kimunya told journalists on Friday.
For the first time in its half a century of existence, the Nairobi Stock Exchange (NSE) will hit the one trillion Shillings mark (US$16.7 billion) in market capitalization on 9 June when the shares of Safaricom are formally listed to trade.
The new investors are two times the current capacity of the NSE, which had 800,000 investors at the end of 2007. It was not immediately clear if the new 800,000 were first-time investors on the bourse.
Analysts chided the government of "duping" the local shareholders who sought to get a bigger chip of the profit-making firm.
The 10 billion ordinary shares are to be split between the local investors, which included all East African investors classified as local to "give the widest possible reach".
The local retail investors were allowed to compete for 3.8 billion shares on offer, for which there were 864,228 people who applied for the shares The total worth of shares applied for under this category totaled Ksh113.2 billion, with an over-subscription of 669%.
Safaricom employees got the majority of the shares with 84% allocation rate for all the shares applied for. It was not immediately explained why the firm's employees got the highest allocation but stockbrokers said most of the shares would go to proxy investors.
The firm's shares were sought on an international scale with 3.5 billion shares offered to the international investors. Some 90 foreign investors showed interest, offering Ksh76 billion and over-subscribing at 711%. The foreign investors sought 14.2 billion shares.
In the new allocation criteria, the foreign investors will get 15% of the shares applied for while retail investors will get 21% of the shares they sought. Initially, the government promised a minimum of 2,000 shares, each at Ksh5. The investors will get 400 shares.
Institutional investors, who include international fund managers and pension fun ds, will get 31% of the shares they sought.
Nairobi - 30/05/2008
Pana
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