Capital Markets

NBV’s new investment deal to cut Delta Stake

BDKShoe2803

A K-Shoe shop along Kenyatta Avenue in Nairobi on March 28, 2016. FILE PHOTO | NMG

alushula

Summary

  • The Nairobi Securities Exchange-listed firm which started off as a shoe-seller has already informed the Capital Markets Authority (CMA) about the impending deal.
  • The firm’s founder and now board member Abutola Vasu told the Business Daily that the deal will be a merger, with the potential investing companies’ assets and business lines expected to become part of NBV.

Nairobi Business Ventures #ticker:NBV (NBV) is eyeing a new buyout deal that is expected to cut the stake of top investor, Delta International FZE, in the firms’ latest bid to diversify business lines.

The Nairobi Securities Exchange-listed firm which started off as a shoe-seller has already informed the Capital Markets Authority (CMA) about the impending deal.

The firm’s founder and now board member Abutola Vasu told the Business Daily that the deal will be a merger, with the potential investing companies’ assets and business lines expected to become part of NBV.

He said if successful, the new tie-up will change the current shareholding structure of NBV by cutting the stake of top shareholder Delta from the current 84 per cent, although he did not give the size of the expected reduction.

“The company is in negotiation with a few potential companies interested to get a stake in NBV by bringing their business and assets into NBV,” said Mr Vasu.

“Delta is now the major shareholder but if the new transaction is completed, its stake will be diluted percentage-wise. It is all about making NBV much bigger than it was before.”

The Dubai-based Delta late last year acquired 84 per cent stake in NBV at Sh83 million, squeezing the rest of investors into a minority stake.

It is not immediately clear the extent by which Delta’s stake will be diluted or the new business lines that will be established if the current deal is concluded.

“Delta’s idea is to make NBV big and take it further. This new deal is a continuation of this vision and will expand NBV line of business by putting up new products,” said Mr Vasu.

Delta, the owner of multiple businesses including Shreeji Chemicals, last year said it wanted to shift the company into cement production.

NBV started out as a shoes distributor in Kenya through the brand name ‘Kwanza Shoes’ and ran on the model of importing shoes from China and India. The company later in 2013 changed the brand to ‘K-Shoe.’

The firm posted a net loss of Sh34.72 million in the last financial year to March 2019, narrowing from a Sh76.53 million loss posted in the previous financial year.