- The Ruiru-based firm said it intended to hand over its business to Coffee Management Services Limited (CMS).
- Eaagads is awaiting approval from the Capital Markets Authority before finalising the deal.
- There was no word on the fate of the coffee grower’s 216 employees.
The board of listed coffee grower Eaagads Limited #ticker:EGAD has decided to sub-contract operations on its 203-hectare farm to a regional management company in a move that could result in lower operational costs.
In a communication sent out to shareholders, the 70-year old Ruiru-based firm said it intended to hand over its business to the Coffee Management Services Limited(CMS), a firm associated with global coffee roaster Dormans with a presence in Kenya, Rwanda, Uganda and Tanzania.
The NSE-listed company, which is currently trading at the bourse at Sh22 per share, said it is awaiting approval from the Capital Markets Authority before finalising the deal.
Fate of employees
There was no word on the fate of the coffee grower’s 216 employees given that CMS is a fully-fledged enterprise with staff handling activities including farm management, milling, coffee marketing as well as a direct linkage of farmers to local and foreign coffee roasters.
Kofinaf holds a 61.74 per cent shareholding in loss-making Eaagads, which last year recorded a Sh7.7 million half year net loss for the year ending September 30, largely attributed to an unrealised Sh30.2 million value loss on revaluation of its assets.
“The company's coffee bushes are in good shape and management expects the company's operations to remain profitable for the remainder of the financial year,” Eaagads said in a statement Tuesday.
CMS also runs a 3,326-acre coffee farm owned by Tatu City owners, Rendeavour Group.