President William Ruto yesterday announced that the government will sell a portion of its ownership in the Kenya Pipeline Company (KPC) and list the firm on the Nairobi Securities Exchange by September 2025.
KPC is a government corporation that transports, stores, and manages petroleum products in Kenya. After approval by all concerned authorities, the firm will go public on the securities exchange through an Initial Public Offering (IPO) – which will effectively end the 10 year drought of IPOs at the NSE.
“I expect the Cabinet to grant approval to this IPO shortly, the privatization commission is working on the final approval, and by September, we will have the listing,” President Ruto said at the NSE during the bell-ringing ceremony for the successful listing of the Linzi 003 Infrastructure Asset-Backed Security (ABS).
Initial Public Offers(2006-2025)
In an IPO, a firm sells its shares to the general public for the first time on a securities exchange to raise more capital. Financial statements are reviewed, regulatory approval is secured, price and allocation are finalized, the company’s value is evaluated, and finally, the company is listed on the exchange at an initial price.
KPC’s listing is expected to generate strong investor interest due to its strong revenue background, consistent profitability, and significant decrease in long-term debt.
Kenya Pipeline Company Revenue 2015-2024 (Billions)
In the year ended June 2024, the company recorded a net profit of Sh6.87 billion – a 52.7% growth from KES 4.5B recorded in the previous year.
Kenya Pipeline Company Net Profit 2015-2024 (Billions)
The energy firm has significantly reduced its long-term debt, demonstrating better financial standing. By lowering its debt obligations, KPC positions itself more attractively to investors.
Kenya Pipeline Company Long-term Debt 2016-2024 (Billions)
The company has 18,173,300 shares, with the National Treasury owning 99.9% and the Ministry of Petroleum and Mining 0.1% of the shares.
In a press release earlier this year, the National Treasury Cabinet Secretary Hon John Mbadi said that KPC needed to realize the benefits it would accrue from listing on the securities exchange. He cited Safaricom and KenGen as examples of corporations that have benefited a lot from listing on the Nairobi Securities Exchange.
“Listing will be a good idea, especially as KPC expands into the region, because it will provide much-needed liquidity and capital for expansion and diversification into LPG. Kenyans will have a chance to own a piece of KPC,” he said.
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