Kenol workers win orders stopping Puma buyout bid
Posted Wednesday, June 27 2012 at 20:55
Industrial Court judge Paul Kosgei restrained the oil market from affecting the transaction until the dispute between it and more than 100 workers is heard and determined.
The employees asked the country’s Industrial Court to block the deal, saying the new owners could restructure the firm and fire them.
Majority shareholders, estimated to own about 70 per cent of the firm, had agreed to cede their shares to Puma Energy and minority shareholders would have no option, but to sell their stakes at an agreed price.
KenolKobil CEO Jacob Segman said the Swiss firm would complete its due diligence — investigation of a business prior to signing a contract — in July paving the way for negotiations.
“If the due diligence and subsequent negotiations are satisfactory, then Puma Energy may proceed with the transaction subject to applicable regulations,’’ said Mr Segman in a statement.
Delay in closing the deal has opened a window for KenolKobil employees to move to court seeking to block the buyout over fears that the new owners will not be liable for contractual commitments made by the present employer.
More than 100 employees led by Philip Otenyo, Vincent Njoroge, and Ronald Lugaba, lodged an application at the Industrial Court and a judge allowed them to institute a representative suit on behalf of all the workers.
“Unless the court intervenes, the claimants’ employment risks termination as once the restructuring process is realised their future will be left at the whims of Puma Energy,” argue the worker’s lawyers.
According to the employees, the proposed restructuring is likely to lead to loss of salaries, accrued benefits, and terminal dues.
On Wednesday, the oil marketer whose shares resumed trading at the bourse last Wednesday, was guarded on the outcome of the due diligence.
“The company remains cautiously optimistic that a transaction with Puma will materialise,” said Mr Segman.
Puma Energy said it would consider making a take-over after acquiring a majority stake in the firm, paving the way for delisting it from the Nairobi bourse.
The company will follow in the footsteps of Unilever Tea Kenya Ltd which delisted from the Nairobi Securities Exchange in 2009 after its main shareholder, Brooke Bond, bought out minority shareholders.