CBA to fund British kin’s Rea Vipingo Sh1bn buyout

Two UK-based brothers have tapped Commercial Bank of Africa to finance the full take-over of Rea Vipingo in a deal worth Sh1.03 billion.

The duo, Richard Robinow and Jeremy Robinow, through Rea Trading Company, on Thursday said they have secured a loan of $8 million (Sh694 million) from CBA Bank and have deposited another $4 million (Sh347 million) in the lender to complete the deal before April.

Rea Trading Company (REAT), which already holds about 57 per cent of Rea Vipingo, has offered to buy the entire stake of the other shareholders or 25.77 million shares at Sh40 a piece — a 45 per cent premium on Thursday’s trading price at the Nairobi bourse.

READ: British brothers offer to takeover NSE listed Rea Vipingo

“REAT has agreed to charge … a total of 42,000,000 Rea Vipingo ordinary shares as security for the borrowing facilities that it has arranged with CBA to assist in financing the take-over offer,” Rea Vipingo said in a notice to shareholders.

Quit board

The loan of Sh694 million is equivalent to 9.3 per cent of the estimated Sh7.4 billion that CBA lent in the nine months to September.

If the deal goes through, the brothers intend to de-list the sisal-growing company from the Nairobi Securities Exchange (NSE), joining at least eight companies that have quit the board for various reasons, including takeovers and failure to comply with the bourse rules.

Firms that have de-listed or are in the process are CMC Motors, Unilever Kenya, East African Packaging Ltd and Lonrho Motors.

For the deal to go through, shareholders controlling more than 75 per cent of the company or 45 million units must support the deal. The price of the company’s shares values Rea Vipingo at Sh2.4 billion, was announced.

Rea Vipingo owns nearly 70,000 acres of land in Kenya and Tanzania, and has offered minority shareholders a 47 per cent premium on the 90-day average price to sell their stake.