Centum set to buy 5.53 per cent stake in Deacons fashion retailer


Centum Investment Company chief executive officer James Mworia and Deacons Kenya CEO Muchiri Wahome (left) during Centum's investor briefing at Two Rivers mall, Nairobi, on June 8, 2016. FILE PHOTO | DIANA NGILA | NMG

Centum Investments #ticker:ICDC is set to buy a 5.53 per cent stake in Deacons #ticker:DCON following an agreement to purchase Aureos East Africa Fund's entire stake in the fashion retailer.

Aureos, through a notice sent by the NSE to investors, has indicated that the private equity fund is ceding its 6.8 million shares in Deacons to Centum in a transaction whose value has not been disclosed.

Aureos, which is a part of the Abraaj Group that recently bought the coffee chain Java, was the seventh largest single largest shareholder at Deacons, an NSE-listed company.

READ: Java founder to pocket Sh1.3bn in takeover deal

“Completion of the above transaction is subject to several conditions including the Capital Markets Authority (CMA) approving the transfer of the shares via a private transaction,” Deacons says in a statement to investors.

“The completion date for the private transaction shall be the second business day after the satisfaction of the conditions precedent in the agreement between Aureos and Centum or such later date as the parties may agree in writing.”

Net loss

Deacons reported a net loss of Sh278 million for the year to December, compared to the previous year’s Sh100.6 million, as lower sales saw it slip into the red.

The retailer’s revenues dropped 7.4 per cent to close the year at Sh2.3 billion due to supply challenges from South Africa in the second half of the year under review and lower customer numbers in existing malls.

READ: Deacons blames drop in earnings on supply hitch

Deacons, which in February opened four shops at Two Rivers shopping mall, saw its bottom-line further affected by expenses which increased 24.7 per cent to Sh1.41 billion.

The retailer also said that interest rate capping on bank lending effective last September led to a reduction in liquidity in the market, decreasing customer spend and store productivity.

READ: Deacons takes Sh1.3bn loans above rate cap