Businessman Kamlesh Pattni has announced his intention to sell his entire shareholding in Marshalls East Africa months after gaining control of the loss-making auto dealer from his business rival Ketan Somaia.
Mr Pattni though his investment vehicle — Marshalls Investments Limited — has issued a notice to shareholders in Wednesday’s Daily Nation of plans to sell his 48.6 per cent stake in the company worth Sh90.2 million.
“It is notified for information to the general public that Marshalls Investments limited, who is the majority shareholder in Marshalls Limited intends to sell up to seven million of its shares,” reads the notice.
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 Mr Pattni 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 grab its market share, which has seen its sales fall and a deepening of losses since 2007.
It lost the Peugeot franchise in 2007, ending the 47-year partnership Marshalls had with the France-based firm.
Investors have taken notices as its share has become the least sought after at the Nairobi bourse and goes for weeks without trading, including on Tuesday.
Its share price stood at Sh12.40 on Tuesday and has shed 12.3 per cent over the past year and gained 8.77 per cent in the past six months.
Marshalls East Africa is betting on luxury and commercial trucks market with new models from Ashok Leyland, Audi and Force Motors to return to profitability.
The auto company reported a net loss of Sh50 million in the six months to September compared with a Sh93 million loss in a similar period last year on revenues that dropped 25.4 per cent to Sh99.4 million.