The Kenyan Government’s Privatisation Commission is taking the next step towards selling a portion of Consolidated Bank of Kenya Ltd (www.consolidated-bank.com) by appointing PricewaterhouseCoopers as transaction advisers, according to the Daily Nation newspaper (www.nation.co.ke). It is on the list of 23 State-owned enterprises to be privatized, including National Bank of Kenya and Kenya Wine Agencies, 5 sugar factories and 11 hotels.
David Wachira, the bank’s Managing Director said the Government aims to raise KSh5 billion (US$65 million) by selling a portion of the shares to the public. Due diligence is to start in April and the share sale could come in the next two years.
The bank mainly finances small and medium-sized enterprises. It has 11 branches, mainly in Eastern, Central, Nairobi and Coast regions and aims to use some of the funds raised through privatization to expand to fast-growing areas such as Kisumu, Nakuru and Eldoret towns.
According to its website, the bank is 100% Government-owned with the majority shareholding (51%) held by the Treasury through the Deposit Protection Fund. The remaining shareholding is spread over 25 parastatals and other government related organizations.
The news report quotes Mr Wachira: “The bank has a risk-based pricing on its loans, which determines whether the lending rate is above or below 13%.”
Although the privatization exercise has been going slowly, Solomon Kitungu, of the Privatisation Commission, says they have submitted proposals on how to proceed to the Treasury late in 2009 and are working on final details of remaining companies before presenting details to the Treasury.
He is reported as saying: “We are on course with the plans, it is only that there is a lot of work to be done to ensure transparency and accountability. We do not want to rush it since we would not be creating any value for Kenyans.”
The budget for the 2009/2010 fiscal year does not depend on proceeds from privatisation sales, unlike the budget for the previous year, says the paper.