Pattni offloads his 50.7pc stake in troubled Marshalls
Posted Wednesday, July 25 2012 at 20:26
Businessman Kamlesh Pattni has sold his 50.7 per cent stake in Marshalls East Africa to a consortium of nine investors — including existing shareholders.
The sale comes months after he gained control of the loss-making car dealer from his business rival, Ketan Somaia.
Regulatory filings to the Capital Markets Authority (CMA) show that Mr Pattni’s investment vehicle, Marshalls Investments Limited, has disappeared from the list of top shareholders while six existing owners increased their stake by 22.7 per cent.
Three new investors — Global Ltd, Azmaveth Investment and Kobos Ltd — entered the car dealer’s top shareholder list with a combined stake of 28.4 per cent.
Sources close to the transaction said it happened between April and May and it came as a surprise because analysts and car dealers had expected that Mr Patnni would sell his stake to global car dealers angling for the Kenyan market.
Woodside Ltd, Abner Holdings, Ahoh Investment, Kenaz Holdings, Aijalon Investments, and Ramoth Holdings are the existing shareholders whose stakes have risen by between 1.8 per cent and 8.1 per cent.
Mr Pattni has issued a notice to shareholders in March 13 of his intention to sell up to seven million shares or 48.6 per cent stake in the company.
The market value of the deal is estimated at about Sh90 million based on the car dealer’s average share price of Sh12.30 at the Nairobi Securities Exchange for the 7.2 million shares.
“A large Asian vehicle manufacture could be seeking to use Marshall’s dealership network in the country to establish a presence in East Africa,” a former executive of Marshalls said when Pattni announced his intention to dispose of the shares.
Last year, Mr Pattni ceded another 15 per cent stake that earned the controversial businessman more than Sh30 million.
The deal happens barely two years after he wrested the firm back from business adversary Mr Somaia, who had since 2006 been fighting for control of the firm’s boardroom and executive suite.
Mr Pattni has insisted that he bought a controlling stake in Marshalls, arguing that Mr Somaia had refused to transfer the shares to him, a contest that played out in the firm’s AGM as the warring shareholders held parallel meetings.
The shareholder spat saw Marshalls end up with six CEOs in three years, a turnover that has hampered the firm’s ability to develop long-term strategy and hire top talent in the increasingly competitive auto sector.
Besides the board wrangles, a thin product line and sluggish sales in Kenya’s new vehicle market has helped rivals such as General Motors, CMC and Toyota to grab its market share, which has seen its sales fall and a deepening of losses since 2007.