ETHIOPIA – Atlas Development, an oil and gas logistics firm cross-listed on the Nairobi and London bourses, has acquired Ethiopia-based East Africa Packaging Holdings Limited (EAPH), which makes glass bottles.
The firm will be raising new capital to buy the EAPH whose price was not stated.
Atlas chief executive Carl Esprey asked shareholders to approve the proposed increase in the number of shares.
“The acquisition of EAPH is contingent on gaining approval to raise the headroom, so we encourage shareholders to support these resolutions so that we can move forward at pace to implement our vision to develop and broaden our business offering,” said Mr Esprey in a statement.
The acquisition is in line with Atlas Development’s establishment of an industrial division intended to diversify revenues away from logistics.
“Atlas has created an industrial division to broaden sector focus and diversify cyclical services revenue streams. Industrial division has entered into an agreement to acquire EAPH focused on the growing beverage industry,” said the firm in the statement.
The company is looking to reduce dependency on the oil and gas sector whose declining fortunes are expected to drive down the company’s revenues to Sh1.5 billion for 2015.
“Following the decline in the oil price, trading conditions for the company’s core services division remain very challenging, with revenue for the 12 months to December 31, 2015 expected to be approximately $15 million (Sh1.5 billion),” said the company.
As a result of the reduced business, the company has suffered on the Nairobi Securities Exchange with its price falling by nearly 70 per cent year to date.