Treasury agrees to new shareholding structure at NSE
Capital Markets Authority acting CEO Paul Muthaura. NSE will offer 81 million shares to the public through an PO. FILE
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Even as the process seems to be going ahead, it is unclear whether the approvals will be issued in time to allow NSE to self list by June 30, a date offered by the bourse as a target by which to open an IPO.
The Treasury has agreed to a new shareholding structure of the Nairobi Securities Exchange, removing the final hurdle in demutualisation of the bourse.
Capital Markets Authority (CMA) acting chief executive Paul Muthaura said yesterday that the new shareholding structure has been approved by Treasury secretary Henry Rotich, as per proposals in the national Budget statement.
Under the new shareholding plan, the government has accepted a reduced holding in the bourse from its earlier 20 per cent to 10 per cent which will be held in two equal stakes of five per cent each by the Treasury and the Investor Compensation Fund (ICF).
“One of the final challenges was the gazettment of the necessary regulations to deal with the share value allocation across the exchange. That has finally been signed off by the Cabinet secretary,” said Mr Muthaura.
The Treasury had earlier insisted on holding on to the 20 per cent ownership of the bourse, a situation blamed for the delay of the demutualisation of the market which has been on the table since 2008.
Even as the process seems to be going ahead, it is unclear whether the approvals will be issued in time to allow NSE to self list by June 30, a date offered by the bourse as a target by which to open an IPO.
Demutualisation is the final process before approval of NSE’s self listing, with the bourse saying it has completed all arrangements for the issue. Mr Muthaura remained non-committal on the possible timeframe for the opening of the issue.
He added that while CMA was yet to clear the offer document for NSE’s listing, the two institutions were considering the timing for the IPO launch.
“We are working with the exchange to target the most appropriate timeframe to deal not only with their compliance with the laws but also effective rollout of the offer,” said Mr Muthaura.
Creation of shares
The bourse will offer 81 million shares, or 38 per cent, to the public through the IPO with the price per share yet to be announced. Ahead of the listing, shareholders increased the authorised share capital to Sh850 million from Sh25 million through the creation of additional 825 million shares of Sh1 per value.
The changes were approved at the firm’s 60th AGM held on April 25 in Nairobi, with the shares also set to be consolidated into 212.5 million shares of Sh4 to ensure price stability after listing.
The NSE board has already appointed transaction advisers for the self-listing, led by Standard Investment Bank and Renaissance Capital. Funds to be raised will be used to increase its capitalisation and setting up of a futures and derivatives exchange.
The bourse also plans to introduce Exchange Traded Funds (ETFs), Reits and derivatives trading by the end of the year. ETFs are securities that track an index, a commodity or a basket of assets, but trades like a stock on an exchange.
