Troubled firm Atlas Industries has completed the sale of its Ethiopian glass-making subsidiary to two of its existing shareholders, cutting its losses and marking the second market it has exited after Kenya.
Atlas, which was suspended from trading on the Nairobi Securities Exchange (NSE) in May, says it has sold TEAP Glass Plc to Innovative Africa Investments Ltd and Eagle Investments Ltd.
In the deal, the two firms have surrendered 276.7 million shares — equivalent to an 18 per cent stake — they hold in Atlas.
In return, they have acquired the rights to seek recovery of $2.4 million (Sh247 million) which Atlas says was illegally seized from its bank accounts by Ethiopian authorities.
If successful, the firms will share with Atlas half the amounts recovered after deducting legal expenses.
Atlas also stands to receive $400,000 (Sh41.2 million) should the glass bottling project (Chancho) take off or in the event the two firms sell their interest to other parties.
“The company wishes to notify its shareholders that the disposal of the Chancho Project has now been completed in accordance with the sale agreement. Further updates will be made in due course,” Atlas says in a statement to shareholders.
Other key owners of Atlas include US Global Investors Fund (18.73 per cent) and French PE Duet group (10.3 per cent) as per filings dated March 2016.
The loss-making firm listed on the NSE in December 2014, but shut down its Kenyan operations in 2015 “to focus on growing its Ethiopian business” which turned sour.
Atlas entered the Ethiopian market in December 2015, intending to put up a glass manufacturing facility near the capital Addis Ababa, but soon run into problems with the government.
In May 2016, the Ethiopian Revenue and Customs Authority seized the sums, claiming it as tax arrears owed by Atlas.
Atlas, which has also been suspended at the London Stock Exchange after the resignation of its UK nominated advisers, has also abandoned plans to invest in Nigerian betting industry after failing to raise funds for the investment.