Nairobi Securities Exchange listed stock:
Kenya Electricity Generating Company Ltd (KEGN) shares ascended 2.36% on Tuesday to close the day at Sh6.50. During Tuesday’s action, the shares rose to a high of Sh6.80 and dipped to a low of Sh6.45. Some 1.07 million shares of KenGen changed hands, almost double the stock’s daily average volume of 561,981.
KenGen (KEGN) is in the process of raising Sh28.8 billion through a secondary offering of its common shares in a rights issue format. The rights issue offers existing shareholders the privilege to purchase two additional shares of KenGen for every share of the company they already hold at a small discount. However, the discount of the rights issue was almost wiped out by recent declines in KenGen shares before the secondary offering officially kicked off.
The cost of the rights issue
KenGen (KEGN)’s right issue is expected to consume Sh342 million in the form of commissions and related expenses. As such, the net proceeds that the company will walk away with from the rights issue is expected to be significantly lower than Sh28.8 billion. That is also because the Treasury is taking advantage of the rights issue to convert its Sh20.1 billion loan in KenGen to equity.
Sh8.6 billion for renewable energy
However, KenGen (KEGN)’s management hopes that the rights issue will give them access to at least Sh8.6 billion that they need to finance investment in clean energy production programs. Kenya’s leading electricity producer is doubling down on its renewable energy generation as part of the efforts to reduce the country’s carbon footprint. Kenya was among the countries that participated in developing the Paris climate agreement in late 2015 that seeks to convert the world to renewable energy from fossil fuels to curb continued rise of global temperatures. NASA recently said April 2016 was the hottest April on record.
The rights issue will specifically unlock funds for Kenya Electricity Generating Company Ltd (KEGN) to invest in the production of geothermal and wind energy.
However, KenGen (KEGN)’s management hopes that the rights issue will give them access to at least Sh8.6 billion that they need to finance investment in clean energy production programs. Kenya’s leading electricity producer is doubling down on its renewable energy generation as part of the efforts to reduce the country’s carbon footprint. Kenya was among the countries that participated in developing the Paris climate agreement in late 2015 that seeks to convert the world to renewable energy from fossil fuels to curb continued rise of global temperatures. NASA recently said April 2016 was the hottest April on record.
The rights issue will specifically unlock funds for Kenya Electricity Generating Company Ltd (KEGN) to invest in the production of geothermal and wind energy.
Dyer & Blair and Faida Investments are helping KenGen (KEGN) with the rights issue as the lead sponsors and they will earn Sh0.05 for the job!
Nairobi Securities Exchange listed stock:
Nairobi Securities Exchange listed stock:
0 comments:
Post a Comment