NSE Okays Listing of Kenol, Equity Bank Shares

The board of the Nairobi Stock Exchange (NSE) has approved the listing of Kenya Oil Company Ltd's (Kenol) 45,480,000 ordinary shares.

At the same time, Equity Bank's proposal to list additional 90,516,255 ordinary shares to facilitate its sale of 24.99 per cent to an equity investor - Helios E.B - has been approved.

The decision paves way for Kenol to fully acquire Kobil Petroleum Limited, automatically becoming the largest player in the market with a market share of close to 25 per cent.

The deal also implies that Kenol will have solidified its presence in Africa with outlets in Kenya, Uganda, Tanzania, Zambia, Rwanda and Ethiopia and plans underway for further expansion.

On news of the board's decision, Kenol's share price marginally climbed 0.88 per cent to Sh115 from last Friday's Sh114.

Under the agreement, Kenol provides the management team. The two companies have, however, had different shareholding structures. Kenol will buy Kobil at only a 19 per cent premium in respect to goodwill as per the valuers' estimate of the value of Kobil's tangible net assets as at December 31, last year.

However, Kobil will remain a separate brand owned by Kenol with its own petrol stations, lubricants and aviation fuelling services in Kenya. Kenol will also continue to use the Kobil brand outside Kenya on subsidiaries in Uganda, Tanzania, Rwanda, Zambia and Ethiopia.

The acquisition now awaits approval by shareholders at an extraordinary general meeting on December 19.

Shareholders will receive a detailed circular giving full information about the transaction and notice of the meeting.

Under the deal, Kenol will be seeking to buy 100 per cent of the issued shares of Kobil Petroleum Ltd. The deal's completion had been subject to regulatory approvals from CMA under the Capital Markets Act and the Minister for Finance.

For Equity, the approval means the well-capitalised bank can access additional capital of Sh11 billion to finance its expansion programmes.