Centum buys out Coca-Cola bottlers minority owners
Centum CEO James Mworia (left) and Nairobi Securities Exchange vice chairman Bob Karina during an investors’ briefing in Nairobi on Wednesday. Photo/Salaton Njau
What you need to know:
Centum on Wednesday increased its stake in the merged unit dubbed Almasi Beverages to 43.5 per cent from 35 per cent in the period to September.
The investment firm bought additional shares from minority investors at Kisii Bottlers, Mount Kenya Bottlers and Rift Valley Bottlers who opted to exit rather than take a stake in Almasi Beverages through share swaps.
The firm has recently stepped up investments outside quoted equities to reduce reliance on the Nairobi bourse as a profit driver.
Centum Investment Company has raised its stake in the merged Coca-Cola bottlers after buying out minority investors, giving it clout on the board and in the executive suite of the joint units.
The investment firm on Wednesday increased its stake in the merged unit dubbed Almasi Beverages to 43.5 per cent from 35 per cent in the period to September.
Centum bought additional shares from minority investors at Kisii Bottlers, Mount Kenya Bottlers and Rift Valley Bottlers who opted to exit rather than take a stake in Almasi Beverages through share swaps.
“We invested $5 million (Sh426 million) to buy the additional stake in Almasi Beverages,” said David Owino, the investment manager at Centum on Wednesday, after the firm announced that net profits rose 110 per cent to Sh2.5 billion in the year ended March 31 on a more than doubling of income for the period.
It has a portfolio of more than Sh18.96 billion invested across assets in listed firms, private equity and real estate in Kenya, Uganda, Tanzania, Rwanda, Nigeria and Ghana.
The firm has recently stepped up investments outside quoted equities to reduce reliance on the Nairobi bourse as a profit driver.
Centum will invest up to Sh2 billion, up from Sh500 million last year in private firms like Coca-Cola and real estate. It operates a real estate and infrastructure firm—Athena Properties —that is building a mall in Kenya and is developing properties on the shore of Lake Victoria in Uganda.
The three bottlers have been operating as distinct companies with their own managers, boards of directors and shareholders including Centum that had 44 per cent stake in Rift Valley, Mount Kenya (28.6 per cent) and 23.8 per cent in Kisii as at March.
Centum has emerged a key beneficiary of the merger with the enhanced ownership offering it muscle in the search for new directors and executives.
Stakeholders of the bottling plants were issued with new shares following a swap, which saw Centum become the top shareholder because it had ownership in all the three firms.
But the merger faced resistance from some shareholders, including businessman Matu Wamae, a shareholder in the Mount Kenya factory.
Mr Wamae claimed the transaction was spearheaded by Centum and Industrial & Commercial Development Corporation (ICDC), which also has stakes in the companies. Centum did not disclose the investors in the bottling firms from whom it bought the shares.
Centum has a 27.62 per cent stake in Nairobi Bottlers — which it says accounts for half of Coca-Cola branded sodas sold in the Kenyan market.
Its shares in the four Coca-Cola bottling companies represented 28 per cent of its assets and contributed 20 per cent of its profit and two per cent of the cash flow in the year to March 2012.
The merged unit will become the second largest in market share among the Coca-Cola bottlers in Kenya with 29 per cent, behind Nairobi Bottlers which controls 48 per cent of the market.
Coast Bottlers has 11 per cent market share, Equator 12 per cent, Kisii nine per cent while Rift Valley and Mt Kenya control 10 per cent each.
The firm’s shares were down 2.1 per cent at Sh23 with analysts attributing the fall to profit taking after a near doubling in the share price this year. The share has gained 86 per cent over the past six months.
