Behind the scenes push that made pipeline sale Africa’s biggest offering

Long before the Kenya Pipeline Company initial public offering captured headlines as Africa’s biggest share sale in a decade, a quiet army of more than 60 experts was already deep into a gruelling mission.

They woke up before dawn, combing through thousands of pages of financial records and travelling across the country to verify the value of one of Kenya’s most strategic state corporations.

Their reward came last week when the Kenyan government raised Sh112.37 billion from the sale, with the IPO closing 105.7 per cent oversubscribed, a resounding vote of confidence from investors.

According to the lead coordinator of the IPO transaction team, Belgrad Kenne, the historic listing was the culmination of a demanding three-month process that tested the endurance and patriotism of lawyers, valuers, auditors and financial experts, state officers from the National Treasury, Privatisation Commission and Kenya Pipeline Company (KPC).  

“It was a labour of love and patriotism,” Kenne said in an interview.

“More than 60 experts came together, divided into specialised subcommittees and worked day and night to ensure the country delivered Africa’s biggest IPO in just three months.”

The work began in earnest shortly after the government formally announced the intention to list KPC in August last year, setting an ambitious deadline to complete the transaction before March 31, 2026.

According to him, the tight schedule left little room for error. Teams frequently convened in early morning strategy meetings, reviewing complex technical reports and financial statements that stretched into thousands of pages.

Analysts combed through decades of company accounts, operational data and engineering documentation to develop a comprehensive valuation framework.

The first draft of the transaction report alone ran to more than 5,000 pages, Kenne said.

“Eventually we had to compress everything into a workable document of about 564 pages that investors could digest,” he said.

Before any share price could be determined, the team had to establish the true value of KPC’s vast infrastructure and property holdings across the country.

This included nationwide inspections and asset verification, with legal teams, property valuers and technical experts presenting detailed findings to the larger committee.

They travelled to Kwale, Nairobi, Kisumu, Eldoret, Makueni and Nakuru, among other locations, verifying pipeline infrastructure, storage facilities and land ownership records of more than 250 title deeds.

According to the transaction report seen by the Star, the team established the company’s total asset base stood at Sh123 billion. This include Sh101 billion for KPC and Sh22 billion belonging to the Kenya Petroleum Refineries Limited (KPRL).

Land assets alone were valued at Sh40 billion, including Sh25 billion held by KPC and Sh15 billion belonging to KPRL.

Among the key contributors were property valuation expert, Morris Okoth of ProLand and former KenGen boss, Albert Mugo, who led the inspection and valuation of pipeline assets.

“I want to acknowledge the unsung patriotic heroes and heroines who worked tirelessly from November to deliver this IPO. The two scrutinised and valued KPC’s operational assets and land with incredible diligence,’’ Kenne told the Star.

He also praised the director general, Public Investments and Portfolio Management, Lawrence Kibet, KPC’s Titus Muya and Mercy Vella of Faida Investment Bank for utmost professionalism that led to the success of the offer.

“I also take this opportunity to give gratitude the bold executive, progressive Parliament, decisive team at Privatisation Authority, KPC board and employees for granting the transaction team access to databases and internal records critical for preparing investor presentations," Kenne said.

For Kenne, the successful IPO carried emotional significance. The idea of listing KPC had been floated as far back as 2009, but repeated attempts collapsed amid policy shifts, public mistrust and legal obstacles.

“Many people had lost confidence that this IPO would ever happen,” he recalled. "This time we had a clear mandate and the determination to deliver.”

Kenne said the fact that the offer closed well ahead of schedule remains one of the transaction team’s proudest achievements.

He said the IPO’s momentum accelerated after a series of court petitions challenging the transaction were dismissed by the High Court on the last day of the offer.

Kenne said the rulings triggered a wave of interest from investors who had initially adopted a wait-and-see approach, necessitating the extension announced on February 19, sparking speculation the offer was struggling to attract buyers.

He dismissed undersubscription talks as plain rumours, clarifying that by the time of extension, the offer had already achieved 80 per cent subscription.

Instead, Kenne explained, the team wanted to give investors who had been hesitant due to the legal challenges an opportunity to participate once the courts cleared the way.

“The transaction team also made minor amendments to the IPO memorandum, including provisions allocating two board seats to Uganda, reflecting the regional importance of the pipeline network that transports petroleum products across East Africa. An extension was necessary for investors to review and react.”

Perhaps the most striking outcome of the IPO was the scale of participation by ordinary Kenyans. According to the transaction report, 72,000 retail investors subscribed to the offer, with 36,000 of them purchasing shares through Safaricom’s NSE trading platform, Ziidi.

Cumulatively, they bought 464 million shares worth Sh4.2 billion, making the KPC offer one of the most widely owned share sales in Kenya’s history.

Kenne said the numbers challenge the narrative that retail investors avoided the offer.

“Globally, retail investors typically account for only about 10 per cent of IPO participation,” he said. “In this case, their involvement was extraordinary.”

To illustrate the scale, he compared the participation with previous Kenyan listings.

According to Kenne, the funds committed by retail investors in the KPC IPO would have been enough to: Purchase 80 per cent of the Sh5.2 billion Co-operative Bank IPO in 2008, fully oversubscribe both the KCB Group and Kenya Re share offers and cover seven times the value of the Nairobi Securities Exchange (NSE) listing.

Kenyan institutional investors received 7.45 billion shares, about 63 per cent of everything sold.

East African regional investors followed with 3.86 billion shares, roughly one third of the offer. Together the two groups absorbed 96 per cent of the IPO before retail investors, oil marketing companies, KPC employees and foreign investors divided what remained.

On Tuesday, KPC walked onto the NSE as the sixth most valuable stock on the exchange, slotting into a Sh100 billion club dominated entirely by banks and a telecoms giant and brewery.

Wedged between Co-operative Bank at Sh175.43 billion and Absa Bank Kenya at Sh163.17 billion, KPC did not only break almost 20-year listing dry spell at NSE, it added Sh163.6 billion to NSE’s total market capitalisation.

Other biggest firms at the Nairobi bourse include Safaricom, Equity Bank, KCB and East African Breweries Plc.

The success of the KPC listing represents more than a fundraising milestone, it is also a sign that confidence is returning to Kenya’s capital markets after years of subdued IPO activity.

“As a country we proved that when experts come together with a sense of purpose and patriotism, we can achieve extraordinary things,” Kenne said.