Wine marketer stake sold to South Africans for Sh860m

What you need to know:

South Africa's Distell Group has paid Sh860 million for a 26 per cent stake in wines and spirits marketer.
Kenya also plans to sell a 51 per cent stake in five sugar millers to strategic investors.

Kenya has agreed to sell a 26 per cent stake in a wines and spirits marketer to its South African partner Distell Group for Sh860 million ($9.81 million), the Privatisation Commission said on Friday.

The sale of government-owned shares in Kenya Wine Agencies Limited (KWAL) to Distell is part of a bigger privatisation programme first announced in 2011 as a strategy to help improve the nation's finances.

The Government owns a 72.65 per cent shareholding in KWAL through the Industrial and Commercial Development Corporation, which is seeking a total exit 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.

READ: Talks reopen over KWAL sale to South African firm.

Distell, whose brands include Amarula liqueur, Two Oceans wines and Savanna cider, is part of a host of South African companies looking to fast-growing African markets to offset sluggish performance at home, where consumers are hampered by high debt levels and sluggish economic growth. KWAL and Distell have had a 15-year partnership for the distribution of Distell’s products in Kenya, which include Amarula and Viceroy.

Kenya also plans to sell a 51 per cent stake in five sugar millers to strategic investors as it looks to complete reforms aimed at making its sugar industry competitive. The government has previously announced plans to sell its shareholding in the country's oil pipeline company, its main power producer, Kenya Electricity Generating Company and three luxury hotels.