Centum says it has booked a Sh370 million loss on the sale of its last remaining drinks business.
Investment firm Centum #ticker:ICDC says it has booked a Sh370 million loss on the sale of its last remaining drinks business Kings Beverage Limited to Danish Brewing Company EA Limited.
Centum said Monday it received Sh130 million from the deal, which is a 74 percent decline of the total capital it has injected into the unit that is the exclusive distributor for Carlsberg and Tuborg beer brands.
The acquirer is a subsidiary of Bounty Global Management Company, which is incorporated in the US.
“Centum made the decision to exit the business having deployed the internally approved investment amount of approximately Sh500 million into the business under the import model. Centum has received a total purchase consideration of approximately Sh130 million, which is a part-recovery of the amount invested,” said Centum.
“The approximate Sh370 million loss on investment represents 0.5 percent of the total assets of Centum.”
Centum said the decision reflected a tougher market in the local drinks business amid competition from the gray market and parallel imports of similar products. “It was evident that the business would not be able to scale up volumes to warrant the further investment by Centum into local production.”
Centum founded Kings Beverage in 2014 and had recently sought distributors to expand countrywide and boost its revenues.
Centum in June this year announced that it would offload its shareholding in Almasi Beverages Limited (ABL) and Nairobi Bottlers Limited (NBL) for Sh19.5 billion to pay off debt and make new investments. The firm had said it had entered into agreement with Coca-Cola Sabco East Africa (CCBA) to sell its entire 53.9 percent stake in ABL and 27.6 percent of issued shares in NBL, subject to regulatory approval.