KENYA – Coca-Cola Beverages Africa (CCBA) is set to acquire unknown stakes in two Kenyan Coca-Cola franchise bottlers from public investment company, Centum Investments.
Centum, which operates as an affiliate of the Kenyan government-owned Industrial and Commercial Development Corporation is set to sell its stakes held in Almasi Beverages Limited and Nairobi Bottlers, with a total valuation of 19.5 billion shillings ($192.5 million).
Subject to regulatory approval, the deal is set to be closed in the next four months.
“The achieved exit valuation speaks to the success of our investment cycle and portfolio management strategy that included consolidation of 3 bottlers into Almasi Beverages and acquisition of a majority stake in the business.
“The proceeds from these transactions will be applied towards repaying our current U.S. dollar-denominated bank term loans of 7.5 billion shillings (US$75m), which will result in finance cost savings of 700 million shillings (US$7m),” Centum said in a statement.
In 2016, Centum raised its stake in Almasi Beverages to 53.8 per cent after investing US$10 million (Shs1 billion) through a rights issue in the bottling company.
The conclusion of the rights issue translated to Centum the Industrial Commercial Development Corporation (ICDC) controlling about 90 per cent stake in Almasi, hence stakes of some minority shareholders were diluted.
By then Almasi, the holding company of three Coca-Cola bottling firms, was seeking an equivalent amount in expansion capital from its shareholders to improve its bottling operation in Nyeri and Kisii.
With a market share of about 29 per cent of the carbonated soft drinks market in Kenya, Almasi is second-largest Coca-Cola bottler after Nairobi Bottlers- where Centum has 28 per cent stake.
Almasi Beverages is the holding company for Kisii Bottlers, Mount Kenya Bottlers based in Nyeri and Rift Valley Bottlers in Uasin Gishu County and has unveiled plans of setting up an additional bottling plant in Eldoret.
Centum, which invests in listed firms and private companies also said it planned to invest an extra US$10 million to US$15 million (Shs10-15bn) via its private equity arm in the next five years, reports Reuters.
However, the Nairobi Securities Exchange-listed firm said it would look to invest in sectors it was already familiar with.
According to Fred Murimi, managing director at Centum Capital, the firm has eight distinct business lines; Real estate & infrastructure, financial services, fast moving consumer goods, power, education, ICT, agribusiness and health.
Centum reported a 41% rise in full-year pretax profit while its total assets rose to US$1.017 billion (Shs101.76bn) from US$962.9 million (Shs96.29bn).