ETHIOPIA – Ethio-Sugar Manufacturing Share Company, a newly established sugar company, has started negotiations to acquire pioneering state-owned sugar producers Wonji-Shoa and Metehara Sugar Plants.
According to the company’s management, the negotiations of the acquisition process commenced immediately after the company gained legal status and has so far seen about six rounds of negotiations conducted.
“So far, the outlook is positive,” said BitewAlemu, general manager of Ethio-Sugar adding that the government is generally receptive to the proposals, but the process is yet to be completed.
According to The Reporter, Ethio-Sugar is also implementing a bold strategy to attract close to 40,000 shareholders from within the communities where these factories are located.
ErssidoLenebo, vice president of the company, notes that the company intends to roll out US$27.78 million (800 million birr) worth of shares to about 11,000 farmers involved in sugarcane out-grower schemes, 20,000 employees and 10,000 civil servants.
Ethio-Sugar has agreed with Awash Bank, Oromia Cooperative Bank and United Bank to arrange a personal loan payable within five years to the groups of shareholders
Erssidoalso says the modality is specifically designed to include farmers and workers to share the benefits of the project, instead of being marginalized.
The next group of shareholders will constitute 20,000 individual and corporate investors and members of the ‘diaspora community’ who will have an opportunity to purchase a minimum of 10 shares at a par value of 1,000 birr per share.
The maximum limit of shares is set at 50,000 of the total three million shares, valued at US$104.17 million (3 billion birr), which have been floated and trading for the past three months.
According to Bitew, the founding members will retain 35 percent of the overall shares, while HVA Netherlands, the original owners of the two sugar plants, will have a 39 percent majority in the two plants, if the deal managed to go through.
The remaining 25 percent of the shares are allotted to individual shareholders while the
Previously, some US$381.94 million (11 billion birr) was offered to purchase the two sugar factories which Bitew says the price doesn’t necessarily reflect the actual value of the two factories.
“It is an estimate. We are still negotiating and nothing has been finalized yet. The 11 billion birr (US$381.94 million) is just a rough estimate,” he said.
Ethio-Sugar says it will be able to finalize the acquisition process by the end of June, 2020.