PwC to advise KenGen on new public share sale

The government has picked consultancy firm PricewaterhouseCoopers (PwC) to guide the sale of the main electricity generator KenGen, giving impetus to a process that had attracted 14 consortia.

“PwC now has the mandate to provide advisory services on the KenGen sale and we expect them to carry out a review of the timing and needs of the process,” Privatisation Commission of Kenya CEO Solomon Kitungu said.

Fourteen consortia had expressed interest in the KenGen sale advisory job, but only nine made it to the pre-qualification round with PwC emerging the final choice after a lengthy evaluation process that began on July 15.

A preview of the expressions of interest (EOIs) and the subsequent bids submitted to the commission to advise on the sale of KenGen had pointed to a repeat of the perennial battles for deals between investment banks led by Dyer and Blair and Standard Investment Bank (SIB), on one hand, and audit firms such as KPMG and PricewaterhouseCoopers (PwC) on the other.

“PwC had a good run throughout the evaluation process and beat others to the job,” Mr Kitungu said.

By landing the lucrative KenGen deal, PwC now has four privatisation assignments in its in-tray, translating into good fortunes in terms of transaction fees.

Besides generating professional fees, such transactions also provide firms with an opportunity to improve their CVs and publicity.

The government currently owns 70 per cent of KenGen.

Attracted interest

“We shall set things rolling once we sign the contracts,” Vishal Agarwal, a partner at PwC told Business Daily.

PwC was the transaction advisor on KenGen’s successful initial public offer (IPO) barely four years ago.

In the 2006 offer, KenGen had sought Sh7.8 billion but landed Sh26.5 billion, an equivalent of 340 per cent oversubscription.

“We will be delighted to work with KenGen once again on the sale process,” Mr Agarwal said.

The KenGen issue attracted plenty of interest from retail investors with analysts attributing the trend to a guaranteed yield and repayment of capital upon maturity.