Uganda and NSSF Among New Top Shareholders After KPC Block Trade Worth KSh42.5bn

Unidentified investors moved 4.5 billion Kenya Pipeline Company (KPC) shares valued at KSh42.5 billion through a block trade on the Nairobi Securities Exchange, resulting in the government of Uganda and Kenya’s National Social Security Fund (NSSF) becoming the firm’s new top shareholders.

The transferred shares amount to 24.76 per cent of KPC’s stock, staying just below the 25 per cent level that would have required approval from the Capital Markets Authority.

The deal brought attention to Uganda, the NSSF and the Public Servants Pension Scheme as the only KPC shareholders able to shift up to 4.8 billion shares via a block trade.

Rock Investment Bank acted as the broker for the sale, while the buyer was a client fronted by KCB Capital. The NSE said: “KPC moved 4.5 billion shares worth KSh42.5 billion and closed at KSh9.02 (up 0.22 per cent). The Block trade was concluded through the Block Board provided for in the NSE trading Rules.”

Under the NSE Equity Trading Rules, block trades are processed on a dedicated board and must meet minimum size and disclosure requirements. Trades exceeding KSh3 billion must represent at least five per cent of an issuer’s total issued shares, whereas trades below that threshold must exceed fifteen per cent, with a maximum cap of 24.99 per cent to prevent unintended takeover bids.

The shares were sold at KSh9.02, essentially the same price as the IPO offer of KSh9 per share that opened on January 19, closed on February 24 and began trading on March 9.

During the IPO, Uganda together with 13 state-backed pension schemes and agencies contributed KSh95.8 billion of the required KSh106.3 billion. The NSSF purchased KSh38.5 billion, Uganda KSh33 billion, the Public Servants Pension Scheme KSh13 billion, the County Workers Pension Fund KSh3.6 billion and the Unclaimed Financial Assets Authority KSh3.2 billion.

About ninety per cent of the top owners acquired their stakes through proxies, keeping the identity of beneficial owners hidden. Regulatory filings show that eighteen of the top twenty shareholders are held in nominee accounts, a structure used to mask true ownership, including the NSSF and state agencies which split their holdings across several nominees.

Local retail investors bought KSh4.1 billion against an allocation of KSh21.2 billion, foreigners invested only KSh32.7 million versus a target of KSh21.2 billion, and oil marketers took KSh22.9 million (0.14 per cent of their KSh15.9 billion allocation).

The KPC transaction follows a series of large block trades as the bourse seeks deeper liquidity and transparency, most notably the KSh204.3 billion sale of a 15 per cent Safaricom stake to Vodacom, the largest single deal ever executed on the exchange.