Kenya’s National Treasury is widely reported to be preparing to sell part of its 35% stake in leading operator Safaricom.
The reason, it seems, is that the government needs the money and Safaricom is the only state-owned (or partly owned) asset that could generate the sort of funds it requires.
According to a Kenyan Times report, the shares are valued at approximately KES280.5 billion (US$2.2 million). The sale will be conducted before June 2026 with the aim of raising Ksh149 billion (US$1.15 million).
Treasury Cabinet Secretary John Mbadi is apparently quite blunt about the appeal of the sale, pointing out that other state-owned businesses that might have been targeted for privatisation would not be worth selling because they have been operating at a loss for years, have been mismanaged, or are not structured as limited liability companies.
At the moment both the Kenya government and pan-African operator Vodacom own 35% of Safaricom. Vodafone owns 5%. The remaining 25% is described by the Kenyan Times as free float.
The same news source suggests that any disposal of the government’s stake in Safaricom may take the form of a secondary initial public offering (IPO) or an auction to a high-net-worth investor for a block sale.
A previous share sale, in 2008, was massively oversubscribed, raising an estimated KES51.75 billion (US$400.7 million today).
The next sale, in theory, could be even bigger – possibly the single largest transaction in the region by deal size. Analysts apparently predict that selling a 5 to 10 percent stake in Safaricom could raise between KES39.8 billion (US$308.2 million) and KES79.7 billion (US$617.2 million) at the current share price of KES19.90 (about US$0.15).
The transaction is likely to attract global private equity firms looking to stake their claim in Safaricom. That’s not too surprising as Safaricom boasts stable revenues and reliable cash flows; these make it the most capitalised firm on the Nairobi Securities Exchange.
