Manufacturing firm Kenya Orchards Limited (KOL) plans to sell 84.4 percent of its shares to a local investor, it said in a disclosure, with the deal projected to net it Sh210 million.
The company, which manufactures spices and other food additives, announced on Wednesday that it plans to sell most of its shares to Africa Mega Agriculture Centre (Amac), a company incorporated in Kenya but not listed at the Nairobi Securities Exchange(NSE).
If the transaction is approved, KOL will transfer 10.8 million of its shares to the company in a private transaction that could yield the shareholders a total of Sh210 million, based on the firm's current share prices. The KOL share price stood at Sh19.50 on Wednesday.
“Shareholders of KOL are advised that KOL was on June 14, served with a notice of intention by Amac to acquire up to 10,863,537 ordinary shares in KOL,” the company said in a public notice.
“The transaction, if concluded, may have a material effect on the price of the KOL securities. Accordingly, shareholders of KOL and the public are advised to exercise caution when dealing in KOL’s shares on the Nairobi Securities Exchange.”
The shares earmarked for sale include those owned by the company’s top three shareholders – Westpac Holdings (34 percent), Tharkashi Keshav Patel (33 percent) and Vipul Tharkashi Patel (15 percent).
The sale is subject to approval by the Competition Authority of Kenya and the Capital Markets Authority. However, the firm said the sale of the shares will not lead to their delisting from the Nairobi bourse, where they are currently trading at Sh2.7 per share.
“Amac has stated that it does not intend to make a take-over offer to acquire all the voting shares in KOL and that there is no intention to delist KOL from the NSE following completion of the Transaction,” it said.
It says the investor intends to diversify the company’s products to help improve its financial performance, “while leveraging on the strong household brand and long heritage of KOL.”
