Faida Investment Bank (FIB) has been selected to midwife the state’s planned partial exit from Kenya Pipeline Company (KPC), in a move that will earn it millions of shillings in fees and give it visibility as the market looks to recruit more retail investors.
The Business Daily has established that FIB has received the award letter for Lead Transaction Advisor and is now earmarked to spearhead the state’s planned sale of up to 65 percent stake of KPC in a bid to raise Sh100 billion.
On October 9, the Privatisation Commission floated a tender inviting bids for provision of services related to the planned divestiture of the state from KPC, including lead Transaction Advisory, lead sponsoring stock broker, reporting accountant, legal advisory services, advertising agency services, public relations services, receiving bank services and registrar services.
In this capacity, FIB will be the overall lead of KPC listing on the Nairobi Securities Exchange (NSE) and play critical roles including development of the Investment Prospectus, which serves as the primary disclosures document that potential investors will rely on when assessing the company’s financial soundness, tax compliance and legal and regulatory standing as it goes to the public market.
As the coordinator of all other advisors selected for a listing exercise, the Lead Transaction Advisor equally stewards the crucial valuation, pricing and allotment to investors looking to become shareholders as the company goes public.
Transaction advisor
“An entity proposing to offer securities to the public or list securities in any market segment shall appoint a transaction advisor. A transaction advisor shall undertake all reasonable and effective measures to avoid or deal with any conflict of interest that may arise in the discharge of duty," the Capital Markets (Public Offers, Listings and Disclosures) Regulations of 2023 state.
"A person is not eligible for appointment as a transaction advisor unless such a person is an investment bank or an investment advisor licensed by the Capital Markets Authority. A transaction advisor shall be responsible for ensuring that the offer for securities and listing is made in accordance with the law."
In 2024, KPC revenues stood at Sh35.37 billion, having grown by 14.62 percent compared to 2023. In the same period, the company’s Profit Before Tax grew by 31.56 percent to close at Sh10.0 billion, making it the most profitable fully State-Owned Enterprise.
Proceeds from Kenya Pipeline’s divestiture are expected to form the seed capital for the Kenya Kwanza Government’s planned National Infrastructure Fund.
The government states that every shilling of privatisation proceeds into the National Infrastructure Fund will be expected to crowd in Sh10.0 of private capital, mainly from pension funds which currently sit on Sh2.3 trillion worth of assets under management.
“We will introduce a financial architecture that leverages capital markets, diversifies ownership through unlocking of capital markets through privatisation, and uses the public-private partnership framework to channel private capital into public priorities.
"For decades, Kenya has privatized national assets yet we cannot point to enduring national assets built from privatisation proceeds because the funds were absorbed into budgetary support. The National Infrastructure Fund will break this cycle. All proceeds from privatisation will be ring-fenced, preserved and re-invested into new infrastructure and wealth creating assets”, President William Ruto said in his November 20 State of the Nation Address.
The KPC Initial Public Offer will be open to non-Kenyan East Africans with the government of Uganda earmarked to take a stake in the company, as the government looks to widen the pool of investors from which it will be seeking to raise capital once the company goes public.
“There is a need for Ugandans and Kenyans, both public and private, to jointly own the Kenya Pipeline Company which provides the supply of fuel into our region," President Ruto said on November 23 while being hosted by President Museveni during a visit to Tororo, Uganda.
"The government of Kenya will be divesting up to 65 percent and I am happy that Uganda is prepared to co-invest with us because that KPC is not just a Kenyan facility, it is a regional facility. As the government of Uganda invests in the Kenya Pipeline Company, I want to encourage Ugandans and East Africans to equally invest."
FIB served as the Lead Transaction Advisor for I&M Bank Rwanda Rights Issue in 2020 which mobilized Sh887 million posting an oversubscription of 12 percent. The investment bank was also the Lead Transaction Advisor for CIC Insurance Group’s listing by introduction at the NSE in 2012.
Other notable undertakings by FIB in the capital markets include having served as the Transaction Advisor in the region’s debut share buyback by Nation Media Group between June and September 2021 and a subsequent share buyback by Centum Investment.
The investment bank also served as an independent financial advisor in the 2019 merger between NIC and CBA banks.
The government had planned to list KPC on the NSE before the close of 2025, a plan that has since been adjusted to March 31, 2026 by the Privatisation Commission.
