KTDA plans to list at Nairobi bourse amid State probeTuesday May 25 2021
Kenya Tea Development Agency (KTDA) board has announced plans to list in Nairobi Securities Exchange to unlock new capital for expansion amid a State-backed investigation of its activities.
The decision to list, which comes amid the reforms in the sector that has put the agency and government on a collusion path, was reached during a special general meeting (SGM) held at the end of last month.
KTDA managing director in charge of management services Alfred Njagi said the company will seek additional growth capital via the bourse and cut reliance on its internal resources.
President Uhuru Kenyatta ordered investigations over alleged abuse of office and economic crimes by KTDA and its officials.
The investigation, which was frozen by the High Court, was to look into “potential price and auction manipulation, abuse of dominance, insider trading, wastefulness and breach of directors' fiduciary duties.”
“Listing will enable KTDA to access external funds from the market, cutting dependency on our own internal finances,” said Mr Njagi.
Mr Njagi said the shareholders have expressed interest in listing at the NSE, a move that will be supported by the company.
The announcement comes at a time when individual smallholder tea farmers affiliated to KTDA will now own direct shareholding of the company alongside their respective 54 Tea factory companies, in a move aimed at cementing their ownership and proprietorship in the organisation.
The move follows the resolutions of the KTDA Holdings shareholders, during the SGM, to amend the company's Articles of Association to enable the allotment of the company's shares to individual farmers under a new category of shareholders known as "Tea Farmers."
Each of the 54 Tea Factory Companies, through their respective portions of 5 million bonus share issue, assigned their shares to their tea farmers, completing the passage to having the tea farmers become direct owners in KTDA Holdings PLC.
The farmers will now collectively own five million ordinary shares, with the factory companies where the same tea farmers are shareholders holding 24 million ordinary shares in KTDA Holdings PLC.
The NSE has faced a drought of fresh listings in recent years.