Capital Markets

NBV at Sh6.7bn market cap after reverse takeover


Nairobi Business Ventures corporate affairs director Vasu Abotula. PHOTO | DIANA NGILA | NMG

The market valuation of Nairobi Business Ventures (NBV) has settled at Sh6.7 billion, three months after the completion of its reverse takeover by Delta International FZE, which has introduced new subsidiaries to the entity.

Delta International’s takeover has come with an increase in NBV’s issued shares at the Nairobi Securities Exchange (NSE) #ticker:NSE to 1.35 billion from 38.6 million prior to the buyout, which combined with a rise in share price has caused a huge jump in market capitalisation for the firm.

Before the announcement of the takeover, the NBV share was trading at Sh0.71, giving the firm a valuation of Sh27.4 million.

The entry of an investor promising to bring in income-bearing assets excited the market and caused a jump in share price to a new all-time high of Sh12.80 in July last year, marking one of the biggest short-term rallies on the NSE.

The reduced liquidity of the stock due to the large majority stake held by Delta International has also helped protect the valuation of the share from erosion despite the big increase in issued shares.

Current NBV chief executive Haresh Soni took control of the firm in November 2020 when he paid Sh83 million for a stake of 84.32 percent through his investment vehicle Delta International.

Mr Soni has since raised this to 94.4 percent after NBV issued him new shares to pay for the acquisition of four companies worth a total of Sh3.4 billion and which are controlled by him and his partners.

The new owners are planning to use the four companies — Air Direct Connect Limited, Aviation Management Solutions Limited, Delta Automobile Limited and Delta Cement Limited — to transform NBV from a struggling shoe retailing business to industrial concerns.

Delta Cement, expected to be the most significant subsidiary of NBV, is to set up a cement manufacturing plant with an annual capacity of one million metric tonnes in Mavoko, Machakos County.

Delta International also holds other local and regional subsidiaries which include Delta Holdings Kenya (real estate), Shreeji Glass Uganda (chemical manufacturing), and Shreeji Chemicals Kenya, which has an annual Sodium Silicate production capacity of about 180,000 metric tonnes.

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