A company owned by the family of the late businessman Naushad Merali has signed an agreement to sell its 35 percent stake in Eveready East Africa to Dubai-based InvestAfrica FZCO, cutting its losses in the Nairobi Securities Exchange-listed firm.
In a filing with the Capital Markets Authority, the batteries distributor says its top shareholder East Africa Batteries Limited (EABL) will sell its 73.4 million shares to InvestAfrica in a private transaction.
This means that the terms of the proposed deal such as the price per share or the aggregate consideration will not be disclosed to the public.
Further, InvestAfrica does not intend to buy out the other shareholders and will leave Eveready’s shares to continue trading on the NSE after receiving an exemption from takeover rules.
“InvestAfrica does not intend to make a general offer to acquire all the voting shares in the company [Eveready] following the proposed transaction and there is no intention to delist the company from the Nairobi Securities Exchange after completion of the proposed transaction,” Eveready said.
“InvestAfrica intends to provide management and technical support to the company following completion of the proposed transaction.”
Eveready’s share price has collapsed to trade at Sh1, down from highs of Sh18 when the company went public in 2006.
Its market value currently stands at Sh226 million, valuing the stake being bought by InvestAfrica at Sh79.1 million.
The sellers –the Merali family- are however expected to be paid a premium to the prevailing market price in line with other privately negotiated transactions.
East Africa Batteries Limited was incorporated on June 23, 1987, in Kenya for the sole purpose of holding shares in Eveready.
The company, part of the Sameer Group, had Naushad Merali, Akif Butt, Mirabeau Da Gama Rose and former Eveready CEO Steven Smith as its directors according to previous disclosures.
Eveready has already shaken up its boardroom to accommodate the planned entry of the strategic investor, with former representatives of Sameer Group replaced by those appointed by InvestAfrica.
Eveready announced it has appointed Maurice Nduranu, Wilfred Ole Saroni (the chairman of InvestAfrica) and Faith Mwaura to its board effective May 10, 2023.
They replaced Lucy Waithaka, Fauzia Shah and Akif Hamid Butt who resigned on the same day.
Mr Nduranu was also appointed as chairman of the company, a role that was previously held by Mrs Waithaka.
Ms Shah and Mr Butt were representing the interest of Sameer Group.
Eveready disclosed a larger loss of Sh17.7 million in the six months to March. The performance was due to sales plunging to Sh10.5 million from Sh41.6 million.
Eveready now focuses on the Turbo brand of batteries and its sales have been dwindling steadily, resulting in losses which have wiped out shareholder funds.
