Eveready stock rallies on entrance of new investorWednesday May 24 2023
Battery distributor Eveready East Africa Plc’s share price has gained 90.7 per cent since the announcement of a new strategic investor on April 24, igniting hopes of a turnaround of the loss-making firm.
The company’s stock hit a 52-week high of Sh1.24 on Tuesday rising from Sh0.65 on April 20, which was the previous trading day before the material announcement was made.
Read: Eveready directors resign as new investor awaited
Following the disclosures, the battery distributor’s market capitalisation has risen to 260.4 million from 126 million, resulting in a paper gain of Sh123.9 million.
The stock gained 9.7 percent on Tuesday alone when a total of 73,500 shares were traded.
The volume has surged to more than 100,000 shares in three days in the wake of the announcement, indicating renewed retail investor confidence in the company, which previously traded on thin volumes.
Eveready disclosed to the Capital Markets Authority that its top shareholder East Africa Batteries Limited (EABL) will sell its 73.4 million shares or 34.9 per cent stake to InvestAfrica in a private transaction.
Eveready said InvestAfrica would leverage its networks to assist the company roll out a turnaround strategy and support its future growth.
The new investor is also expected to tap its networks to assist Eveready in rolling out a turnaround strategy and support its future growth.
Upon completion of the transaction, InvestAfrica would strengthen Eveready’s capacity to fund investments required to support its expansion.
Further, it will aid in the “diversification of the company’s product lines including oil and gas sectors to improve the financial stability while maximising the shareholders’ value going forward”.
Read: Eveready assets wiped out by years of losses
Eveready disclosed a larger loss of Sh17.7 million in the six months to March compared to Sh8.4 million a year earlier.
The performance was due to sales plunging to Sh10.5 million from Sh41.6 million.