Marshalls East Africa, which was delisted from the Nairobi Securities Exchange #ticker:NSE last year, has earned Sh824 million from the sale of its 50 per cent stake in Mombasa-based Associated Vehicle Assemblers (AVA) to Simba Corporation.
A source familiar with the transaction told the Business Daily that the deal was recently concluded, giving Simba full ownership of the assembler.
The parties had not disclosed the value of the deal when it was first announced.
“Marshalls was paid $8 million (Sh824 million) for the 50 per cent AVA stake,” the source said.
The amount is a windfall for shareholders who decided to remain in the struggling company even as it went private.
Marshalls, which now sells a few KIA cars in a year, said it decided to delist in order to gain time and flexibility to reorganise its business effectively.
Marshalls said it would also benefit from elimination of costs associated with maintaining a listing on the Nairobi bourse.
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Prior to going private, the company told shareholders their rights will remain the same “including participation in any future dividends declared by the company.”
One of Marshalls’ significant shareholders, Global Limited, had offered to buy out minority shareholders on a voluntary basis ahead of the stock market exit.
Marshalls has struggled financially since losing the Peugeot franchise deal in 2007, with sales plummeting to less than Sh100 million in recent years.
For Simba, the buyout of Marshalls at AVA gives it full control of one of the country’s three main vehicle assemblers. Thika-based Kenya Vehicle Manufacturers and Nairobi-based Isuzu East Africa are the two other main plants.
AVA offers motor vehicle assembly services on a contract basis. Its current clients include Toyota Kenya and dealers of Scania as well as Tata brands.