- NBV will issue the new shares to pay for the acquisition of four companies worth a total of Sh3.4 billion and which are controlled by Mr Soni and his partners.
- The companies are Air Direct Connect Limited, Aviation Management Solutions Limited, Delta Automobile Limited and Delta Cement Limited.
Nairobi Business Venture #ticker:NBV (NBV) new chief executive Haresh Soni and his associates will increase their stake in the company to a new high of 94.84 percent by taking an additional 857.6 million shares in the company.
NBV will issue the new shares to pay for the acquisition of four companies worth a total of Sh3.4 billion and which are controlled by Mr Soni and his partners.
The companies are Air Direct Connect Limited, Aviation Management Solutions Limited, Delta Automobile Limited and Delta Cement Limited.
The proposed transactions come soon after Mr Soni took a controlling 84.32 percent stake in NBV, which is transforming from a struggling shoe retailing business to industrial concerns, at a cost of Sh83 million through his investment vehicle Delta International FZE.
A circular to NBV shareholders show that Mr Soni and his associates are making a reverse takeover of the Nairobi Securities Exchange-listed firm.
This means that the four companies to be acquired will be brought to the public market without going through the traditional route of an initial public offering (IPO) or listing by introduction.
“The proposed transactions involve companies that are joined by a special relationship,” the NBV circular says.
“In the proposed transactions, Mr Haresh Vrajlal Soni, the sole shareholder of Delta International FZE holds shareholding in the companies listed below [Air Direct Connect, Aviation Management Solutions, Delta Automobile and Shreeji Enterprises which in turn owns Delta Cement].”
The founders of NBV will be diluted further in the proposed transactions. They originally owned 100 percent of the company before the entry of Delta International FZE reduced their ownership to the current 15.68 percent.
The impending deals will squeeze them down to a combined 5.16 percent stake. The value of their ownership could, however, benefit from the transformation of NBV into a potentially bigger and more diversified company.
Announcement of the entry of the new majority shareholder lifted NBV’s share price from below Sh1 last year to the current levels of above Sh5, marking one of the biggest short-term rallies on the NSE.
The stock rally has boosted the paper wealth of NBV founders by millions of shillings, with early speculators also reaping large profits.
Delta Cement, expected to be the most significant subsidiary of NBV, is still in the formation stage. The circular did not disclose the profitability of the four businesses that will be folded into NBV.