Safaricom Floatation Massively Oversubscribed

Preliminary figures from the sale of shares in Kenya's Safaricom has pulled in some Sh191 billion (US$3.3 billion) in bids from local and international investors - substantially exceeding the expected Sh50 billion (US$845 million) that government had hoped to raise.

According to figure released by the government, overseas investors paid a ten percent premium over the domestic price and offered Sh76 billion ($1.3 billion). Domestic investors stumped up bids of Sh115 billion from some 750,000 investors.

Under the terms of the share sale, if the domestic sales exceed 200% of the available shares - then the government would reallocate a portion of the shares set aside for foreign investors to satisfy the domestic sales. The final details of the share allocations are expected within a few weeks and trading on the Nairobi Stock Market should start on the 9th June.

"The IPO has far exceeded the goals laid out at the launch of this process namely - deepening Kenya's capital markets, maximising revenues for the Treasury and increasing international investor interest in the Nairobi Stock Exchange," says the draft report from the Treasury.

On a pan-African basis this will now be the third largest floatation after those of Maroc Telecom and Telecom Egypt.

Following the floatation - the Kenyan government will own 35% of Safaricom, 25% will be floated on the stock exchange and 40% will be held by Vodafone Kenya Ltd - which in turn is 87.5% owned by Vodafone Group and 12.5% owned by the controversial mystery company, Mobitelea.

Both the Government of Kenya and Vodafone Kenya Limited have agreed not to sell any further shares for a period of at least 180 days following the privatisation.

Posted to the site on 10th May 2008

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