George Williamson House in Nairobi. FILE PHOTO | NMG
Listed agricultural firm Williamson Tea has sold its former headquarters office block along Ngong Road for an estimated Sh500 million in a deal that will see shareholders earn a special dividend.
The Nairobi Securities Exchange (NSE) listed firm— majority owned by Ngong Tea Holdings of United Kingdom—sold Williamson House to Lion of Kenya Insurance Company, in which it holds a 50 per cent stake.
Proceeds from the transaction are expected to be paid out to shareholders in the form of a special dividend in the current financial year, said managing director of Williamson Tea, Alan Carmichael.
Williamson Tea is among five resilient stocks at the NSE that have survived a 12-month bear run which has seen all others fall to one-year lows.
Mr Carmichael said the firm’s head offices had been moved to Karen following conclusion of the sale of the prime property to Lion of Kenya, the minority shareholder in Williamson Development, the firm that owns the 10-storey office block. “The transaction involving the disposal of Williamson House was completed last month,” said Mr Carmichael adding: “We are currently moving the company’s offices to Karen because we wish to move out of town.”
Negotiations for sale of Williamson House began in the financial year ended March 2011, and is captured in the company’s 2010 annual report. “The company will inform shareholders on the disposal soon,” said Mr Carmichael.
Its head offices will now be housed at the Karen Office Park along Langata Road as a tenant.
Standard Chartered Bank sold its Moi Avenue headquarters to Muguku Poultry Farm for Sh600 million last year also moving to Westlands, a suburb in the outskirts of the city.
Charles Njoroge, the assistant general manager at the Lion of Kenya, said Williamson Tea had been paid the agreed selling price for eight floors on two towers, though the documentation was incomplete to seal the transfer to its name.
“We are now working on the paper work to conclude the transfer of the property but the price has been fully paid” said Mr Njoroge, whose firm previously owned five floors of the property in the prime Upper Hill business district.
The transaction is expected to boost Williamson Tea’s profits this year since the booked valuations in the previous annual results have been much lower. Williamson Tea had reported the value of the property at Sh275 million in the year ended March suggesting that the difference will be booked as a one-off capital gain.
In the last financial year, the company paid a dividend of Sh15 from the Sh97.50 it reported as the earnings per share, while its cash reserves had surpassed Sh4 billion.
Williamson Tea has about 1,000 small shareholders.
The agricultural firm also has interests in power generation beside growing and processing of tea.Managing director of ApexAfrica Capital, Kassim Bharadia, faulted Williamson Tea’s management for “failure” to notify shareholders of the progress of sale negotiations.
Aly-Khan Satchu, an equity analyst at Rich Management who features among the top five shareholders in Williamson Tea’s share register said he was aware of plans to dispose Williamson House but did not know the eventual selling price.
“I’m not certain about the proceeds amount but I imagine its material,” said Mr Satchu.“The bulk of the proceeds should be returned to shareholders as a special dividend,” he added.
Officials at the NSE said that they were yet to receive a filing from the firm notifying about the disposal. Williamson Tea Holdings owns 39.56 per cent of Kapchorua Tea, another listed tea grower.
