Safaricom presents draft prospectus to NSE

The Safaricom intital public offer (IPO) draft information memorandum has been presented to the Nairobi Stock Exchange (NSE).

And the bourse has already ordered for additional servers to cater for increased trading capacity in anticipation of the IPO in which the Treasury hopes to offload its 25 per cent stake in the country’s most profitable mobile phone provider.

"The ATS (Automated Transaction System) that was commissioned last year has the capacity to handle 150,000 trades in a three hour session, because of the Safaricom IPO, we anticipate our trading environment to triple," Mr Chris Mwebesa, the NSE Chief Executive said yesterday in a statement, " we are therefore increasing our servers to handle this trading traffic."

He said the additional servers are expected in the next two weeks.

He said the move would ensure that the bourse does not experience a backlog of orders once the Safaricom IPO kicks off.

The presentation of the draft information memorandum to the NSE comes immediately after the same was made this week to the Capital Markets Authority (CMA) — the market regulatory body.

Investment Secretary, Ms Esther Koimett, said the Government was considering using an electronic system of application for the IPO.

"User acceptance testing of the system is currently being undertaken, and we have already briefed the market regulator to see whether we can go forward with this system," said Koimett.

She said discussions were currently going on between the capital markets regulator, and other stakeholders involved in the Safaricom IPO on the viability of the system.

The memorandum was presented to NSE by Safaricom Chief Financial Officer, Mr Les Baillie, among others.

Last year the Safaricom’s profit hit Sh17 billion, making it the most profitable company in the region.

With the largest local market in telecommunications of over 77 per cent and a subscriber base of 7.9 million customers recorded by the end of the first-half of this year, Safaricom IPO is expected draw countrywide participation.

Billed as the largest sale ever in the capital market, the offer is already drawing impressive interest from local, regional and overseas investors alike.

Treasury is seeking to offload 25 per cent of its 60 per cent stake in Safaricom to the public through the NSE in a transaction expected to net at least Sh35 billion.