The government has kicked off the first phase of selling its stake in various companies as bridge its budget deficit and cut debt under the IMF led restructuring plan.
On Tuesday, the state announced the disposal of its stake in six listed companies among the 35 earmarked for privatisation.
The government will sell off its entire 25 per cent stake at the East African Portland Cement Limited and a further 27 percent held by National Social Security Fund (NSSF).
The sale of the entire shareholding (both government and NSSF) will see the government get at least Sh17.14 billion according to the firms’ book value.
Other companies in which the government plans to sale its shares are Nairobi Securities Exchange (NSE), with a government stake of 3.36 per cent or equivalent of Sh68million.
Housing Finance Company of Kenya Limited, will also see the government sell off its 2.41 per cent (Sh1.5 billion).
Stanbic Holdings, with a government stake of 1.1 per cent will see government rake in Sh5.1 billion from its sale.
Others are Liberty Kenya Holdings, with a government stake of 0.9 per cent and Eveready East Africa PLC, with a government stake of 17.2 per cent, which will be sold through KDC.
In March 2023, the Cabinet approved the Privatisation Bill 2023, a state-sponsored bill that seeks to sell government-owned entities to the private sector without Parliamentary approval.
“The divestiture in the six companies, through the sale of shares at the Nairobi Securities Exchange, will optimise the contributions of these investments in the realisation of our national development aspirations,” read a statement that followed a Tuesday Nairobi State House Cabinet meeting.
Since January 2024, the government has been on a hunt for buyers to take over their stake in the some of the earmarked companies and parastatals.
However, the country has not had a good record with privatisation with Kenya last successful privatisation of a state-owned company coming in 2008, with an initial public offering (IPO) for 25 percent of the shares in telecommunications firm Safaricom.
Since the beginning of the year, the government has called for expression of interest for acquisition of its shares in three entities namely Kenya Wine Agencies Limited, Hilton International Limited and KICC.
Alongside the six the state had in April 2024, invited bids for its 43.77 per cent stake in wines and spirits firm KWAL Holdings East Africa Limited (KHEAL), which it valued at Sh4.1 billion in the year ended June 2022 according to the latest available disclosures.
Others that in the privatisation list are Kenyatta International Convention Centre (KICC), Kenya Literature Bureau, National Oil Corporation, Kenya Seed Company Limited, Mwea Rice Mills and Western Kenya Rice Mills Limited.
Also Kenya Pipeline Company, New Kenya Cooperative Creameries, Kenya Vehicle Manufacturers Limited, Rivatex East Africa Limited and Numerical Machining Complex.
Despite the renewed push to market the country as a tourism hub, the hospitality sector entities that the government holds stake in will not be spared.
This will see the state push on with offloading of Hilton’s shareholding. According to the most recent disclosures covering the financial year that ended in June 2022, the government holds a 40.58 percent stake in International Hotels (Kenya) Limited, the entity that owns the iconic Hilton Hotel, or a respective 5.8 million shares.
In April 2024, Hilton International Limited invited bids for the acquisition of 59.42pc stake in International Hotels Kenya Ltd, which owns the iconic Hilton Hotel Nairobi located in Nairobi’s Central Business District.
Other state-owned hotels that the government is seeking buyers are Mt Elgon Lodge, Sunset Hotel, Kabarnet Hotel, Golf Hotel, and Safari Lodges.
The government is also in the process of offloading another 33.83 per cent shareholding in Kenya Hotel Properties Limited (KHL), which owns the property previously managed by the Intercontinental Hotel Group.