Privatisation Commission CEO Solomon Kitungu. FILE
The government has opened talks with South Africa’s Distell Group for the sale of a 26 per cent stake in Kenya Wine Agencies Limited (KWAL) after a three-month delay.
The sale was scheduled to take place by June 30, but was delayed by failure to complete due diligence work, an audit that serves to confirm all material facts in regards to a sale.
“Preparations for negotiations to sell 26 per cent to Distell of South Africa are completed and talks are ongoing,” Solomon Kitungu the executive director of the Privatisation Commission told Parliament last week.
The Government owns a 72.65 per cent shareholding in KWAL through the Industrial and Commercial Development Corporation (ICDC).
ICDC is seeking a total exit from KWAL over the next four years, with an initial sale of 26 per cent stake to Distell and a further four per cent ownership to KWAL’s employees.
The remaining 42.65 per cent shareholding is to be offloaded over the next four years.
KWAL and Distell have had a 15-year partnership for the distribution of Distell’s products in Kenya, which include Amarula and Viceroy.
The sale will require Distell to give KWAL exclusive rights to distribute its products in East Africa.
Distell and Kwal were locked in a court battle after the South Africa firm issued a notice to terminate its supply partnership with the Kenyan firm—which opposed the move.
Distell based its move on the continued delay by the Kenya government to privatise Kwal that was to give it an ownership stake in the firm.
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