The Kenya Pipeline Company is considering listing on the Nairobi Stock Exchange through an Initial Public Offering (IPO) to enhance liquidity and capital for expansion. The KPC has reported significant dividends and profits, while also focusing on diversification and environmental sustainability initiatives. Government support is critical for KPC’s strategic expansion and operational success.
The Kenya Pipeline Company (KPC) is exploring a potential listing on the Nairobi Stock Exchange through an Initial Public Offering (IPO), as stated by National Treasury Cabinet Secretary John Mbadi. This announcement followed Mbadi’s receipt of a Sh3 billion interim dividend from KPC, bringing the total dividends paid within the last year to Sh10.5 billion.
Mbadi emphasized that listing KPC could unlock benefits similar to those experienced by other corporations like Safaricom and KenGen, stating that it would enhance liquidity and capital for KPC’s expansion, especially into liquefied petroleum gas (LPG) markets. The proposed listing aligns with KPC’s goals to foster local ownership among Kenyans.
In addition to the IPO discussion, KPC plans to establish a trading hub in Mombasa for petroleum products, enhancing the regional oil and gas sector’s capabilities. The National Treasury also aims to facilitate the smooth transition of the defunct Kenya Petroleum Refinery (KPRL) into KPC operations, which has been delayed.
Lawrence Kibet, Director General of Public Investments and Portfolio Management, revealed that the Government Owned Enterprises (GOE) Bill 2024 has been approved by the Cabinet and is under review. This bill outlines the governance structures and commercial principles for public enterprises, aiming to boost return on investment for the public.
KPC’s financial performance was commended by Mbadi, who noted their Sh10.5 billion profit as indicative of effective management and operational efficiency. He emphasized the role of strong corporate governance in ensuring accountability and sustainable performance among state corporations. KPC has contributed Sh63 billion in taxes and dividends over the past decade.
The company reported a Sh10.1 billion profit before tax for 2023-24, up from Sh7.6 billion the previous year. KPC attributes its success to efficient operations and diversification into sectors such as fiber optic communication and LPG, aiming to remain competitive regionally and secure a larger share in neighboring markets.
KPC has also made strides in environmental initiatives, having planted approximately 600,000 tree seedlings since 2017 to bolster conservation efforts. The company’s partnerships for mangrove reforestation in Mombasa highlighted their commitment to ecological sustainability.
Moreover, KPC is leveraging its extensive fiber optic network to enhance revenue through data services, aligning with Kenya’s Vision 2030 goals for digital transformation. This move underscores the importance of connectivity in supporting economic growth, particularly in underserved regions.
Kenya’s move to list the Kenya Pipeline Company (KPC) on the Nairobi Stock Exchange through an Initial Public Offering (IPO) is aimed at unlocking financial benefits and enhancing public ownership. KPC is strategically diversifying its business to include more revenue streams, such as LPG and fiber optics, while also addressing regional market expansion and environmental sustainability. The initiatives, including the dissolution of KPRL and the establishment of a trading hub, align with government objectives to modernize state-owned enterprises and improve economic contributions.
In summary, the proposed IPO of KPC represents a strategic initiative aimed at improving liquidity and expanding operations in the energy sector. With strong financial performance and a commitment to operational efficiency, KPC is poised to increase its market presence. The company’s focus on environmental sustainability and technological advancement further underscores its role as a leader in the regional energy and logistics industry, while government support remains essential for achieving its objectives.
Original Source: www.the-star.co.ke
