Companies

Botswana firm purchases 30pc stake in Orbit factory

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Workers at the Orbit chemical industries limited pack detergents. FILE PHOTO | NMG

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Summary

  • LLR will buy the stake from Mauritius-based Grit Real Estate Income Group which in March completed the purchase of the asset from businessman Sachen Chandaria in a multi-billion-shilling transaction.
  • LLR will now join Grit to invest a total of $53.6 million (Sh6.2 billion) in the acquisition and further development of the property.
  • Orbit remains a tenant for an initial 25-year lease on the existing factory and warehouses.

Botswana’s real estate firm Letlole La Rona Limited (LLR) has signed a deal to acquire a 30 percent stake in Orbit Products Africa’s manufacturing facilities in Mlolongo at an initial cost of $7.23 million (Sh842 million).

LLR will buy the stake from Mauritius-based Grit Real Estate Income Group which in March completed the purchase of the asset from businessman Sachen Chandaria in a multi-billion-shilling transaction.

Grit holds a minority stake of 30 percent in Letlole.

“LLR has signed a conditionally binding agreement to subscribe to a 30 percent shareholding in the Mauritian holding entity of the asset … currently 100 percent owned by Grit and an injection of approximately $7.23 million (Sh842 million) via a shareholder loan to the Mauritian holding entity, being its pro-rata share of equity contributions to date,” Grit said in a trading update.

“Grit will realise an acquisition fee of $600,000 (Sh69.9 million) from LLR upon completion of the transaction and Grit will also earn an annual asset management fee of 0.5 percent of the value of the asset as a result of the asset management agreement now concluded.”

LLR will now join Grit to invest a total of $53.6 million (Sh6.2 billion) in the acquisition and further development of the property.

Orbit remains a tenant for an initial 25-year lease on the existing factory and warehouses. Orbit is a contract manufacturer for global firms such as Reckitt Benckiser, Colgate-Palmolive, and Unilever, producing fast-moving consumer goods on 20 acres of land in Mlolongo, Machakos which houses the factory.

The redevelopment and expansion of the Orbit Africa warehousing and manufacturing facility is expected to be completed in the fourth quarter of 2023 when the additional space will be let on a new 20-year lease to the fast-moving consumer goods manufacturer.

“LLR’s current portfolio is predominantly comprised of Botswanan premium-grade industrial warehouse assets, and while [this] transaction not only marks LLR's first acquisition outside of the country, it also positions LLR as a preferred funding partner alongside Grit to make further yield-enhancing industrial sector investments that create positive social and environmental impacts,” Grit said.

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