KENYA Law and Practice Contributed by: Sammy Ndolo, Njeri Wagacha, Brian Muchiri and Deborah Sese, Cliffe Dekker Hofmeyr
10.3 IPO The authors are not aware of equity funds exiting by way of an IPO in Kenya. Exits are mainly undertak - en through trade sales and transactions with other financial buyers – unlike the Johannesburg Stock Exchange, which has had the most private equity- backed IPOs in Africa. Nevertheless, exit by way of an IPO is an option. With respect to lock-in arrangements, the Capital Mar - kets (Securities) (Public Offers Listing and Disclosures) Regulations, 2002 provide for a two-year lock-up peri - od from the date of listing of the shares.
there is an exception where the corporate veil can be pierced, and the shareholders are held liable for the actions of the Kenyan target company. This is the case when the shareholders have used the Kenyan target company to perpetuate fraud or circumvent statute fraudulently.
10. Exits 10.1 Types of Exit
In Kenya, the common types of exits are sales to other private equity funds or corporates. The authors have also seen sales to the Kenyan government with respect to equity stakes in publicly listed companies, but they have not seen other forms of private equity exits such as IPOs, auctions or dual- or triple-track It is common for private equity transactions in Kenya to have drag and tag rights. In practice, drag and tag rights are not typically enforced as minority sharehold - ers are usually willing to collaborate with the private equity funds in the event of a proposed exit from a Kenyan investment. exits in the last 12 months. 10.2 Drag and Tag Rights
362 CHAMBERS.COM
Powered by FlippingBook