Safaricom IPO may need to be delayed-party official

By Lisa Ntungicimpaye

NAIROBI, March 25 (Reuters) - Kenya's initial public offering for leading mobile phone services firm Safaricom SCOM.NR may need to be delayed to observe a privatisation law, a senior party official said on Tuesday.

The government has earmarked 10 billion shares -- or a 25 percent stake of the firm worth at least 50 billion shillings ($795.5 million) -- to go on offer from Friday in a key test of investor confidence after Kenya's post-election crisis.

Anyang' Nyong'o, Orange Democratic Movement (ODM) secretary general, said the IPO may have to be delayed to allow a privatisation law enacted in 2005 to be followed, and the sale process moved to a privatisation commission formed in January.

ODM, a former opposition party, is entering a power-sharing agreement with President Mwai Kibaki's government.

"We should proceed with the share offering within the privatisation act, which means the share offering may need to be delayed," Nyong'o told a news conference, without specifying for how long.

The privatisation law was passed to reduce the likelihood of graft whenever the government divests ownership in state corporations.

Announcing details of the initial public offering earlier this month, Finance Minister Amos Kimunya said that the Privatisation Commission had taken over the rest of the IPO process from the Treasury in January.

Preparations for the Safaricom share sale, such as appointing transaction advisers, started in 2007 and were handled by the Treasury.