NSE to price its initial public offering at Sh9.50 per share

Kenya: Nairobi Securities Exchange (NSE)'s planned Initial Public Offering (IPO) will be priced at Sh9.50 per share. Sources in the market who wished not to be named confirmed that the offer price among other inner details have been concluded and as from July 24 to August 2014 the IPO would kick off.

The bourse will offload 66 million shares to the public representing 34 per cent of the total shares.

According to the prospectus seen by our source, NSE will be seeking to raise Sh627 million from the sale of the stated shares. "The offer prices is Sh9.50 and total shares to be offered will be 34 per cent equivalent to 66,000,000. Based on full subscription the number of issued and fully paid up shares of NSE post-offer is 194.6 million," said the source.

The NSE self-listing is being handled by three transaction advisors -Standard Investment Bank, Dyer and Blair Investment Bank, and Renaissance Capital. Once the process is finalised, NSE will be the second bourse in Africa to be converted into a public company guaranteed by shares after Johannesburg Stock Exchange (JSE) established in 1887.

The offer shares include the 2 percent reserved for employees which if not fully taken up by employees will be sold to the public offer during the stated period. Recently, during an interview Capital Markets Authority (CMA) Acting Chief Executive Officer Paul Muthaura said Nairobi Securities Exchange is supposed to reduce the remaining stake to less than 40 per cent within a maximum of three years after listing as outlined in the demutualisaation regulations.

Section 8 of the regulations states, "The trading participants who are shareholders of the Exchange shall with effect from the date of demutualisation reduce their cumulative shareholding in the demutualised exchange to not more than 40 per cent within three years."v"All the demutualisation processes have been well executed. Soon we will be commencing the exercise so that the investors can also own stake in the bourse," said Mr Muthaura.

The offer follows the June 27, 2014 approval by the CMA of the application of the company to offer its shares to the public through IPO and subsequently self-list its shares on the main investment market segment of the NSE.

"We have ensured that the stipulated Capital Markets (Demutualisation of the Nairobi Securities Exchange Ltd) Regulations, 2012 are fully implemented. We have been in communication with NSE shareholders all through to ensure successful process, "he added.

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