NAIROBI (Reuters) - Kenyan private equity group, Industrial Promotion Services (IPS), plans to combine its six agrobusinesses and list the new entity to raise $15 million to $20 million for expansion, the group’s managing director said on Tuesday.
Lutaf Kassam said that IPS, owned by the Aga Khan, the spiritual head of the Ismailia community, said it was eyeing early next year to list the new group on the Nairobi Stock Exchange.
“Our timeline was to do it this year ... with the economic climate it is not the right time to go to the market,” he said.
The firm said that the listing would allow locals to buy a piece of the business as well as raise funds for expansion.
“We see a huge opportunity for expansion,” Kassam said.
IPS aims to combine vegetable-exporter Frigoken, meat processer Farmers Choice, a firm that exports finished leather and Premier Foods, makers of tomato sauce and juices as well as a passion fruit exporter and a company that farms Artemisia, which it sells to Novartis for use in anti-malarial drugs.
Kassam also said that another part of the IPS’ portfolio that deals in infrastructure investments could be hived off and sold on the Nairobi bourse once the group of agro-based firms was listed.
Kassam also said that IPS would build a 50 to 75 megawatt wind power project in Kenya together with German utility EnBW.
“The wind power project will take close to a $100 million,” he said, adding that the project would be commissioned in early 2011.
He said that there had been a marked change in the Kenyan government’s attitude to private power producers since IPS started the first private project in the country, Tsavo Power, in the early part of the decade, and this has enabled IPS to start the wind power project
“The private sector is getting good vibes that they (the government) really mean business. The Kenyan government has finally understood the importance of energy and the need to diversify into greener energy,” Kassam said.
IPS, which has a 25 to 75 equity-to-debt ratio gearing in its investments, is also the lead investor in Uganda’s $860 million Bujagali hydropower project, Kassam said.
IPS has more than 10,000 employees in the region.
IPS also has a stake in the SEACOM undersea fibre-optic cable project and is a major player in power generation projects in the east African region.
Kassam said IPS wanted to invest in Rwanda’s methane to electricity project on Lake Kivu and was looking in to how to proceed.
“On paper, conceptually, it (methane to electricity) is very sexy, but the trick now is to find implementation and to move ahead,” he said.
Other Aga Khan groups operating in east Africa include Nation Media and hotelier TPS Eastern Africa.