KENYA – Mauritian multinational conglomerate, Alteo, has increased its stake in Kenya based Transmara Sugar Company Limited from 51 percent to 69.2 percent at a cost of US$8.2 million ahead of a proposed restructuring of the ownership structure of the miller.
Transmara Sugar, which was established in 2011, has a crushing capacity of 180 tonnes of sugar cane per hour or up to 4000 tonnes per day.
Alteo took the controlling stake in Transmara Sugar in 2015, adding it to its portfolio of sugar firms in Mauritius and Tanzania, where it operates TPC Limited with an effective stake of 45 percent.
The multinational holds its stake in the miller through a cascade of two investment vehicles— Sucrière des Mascareignes Limited and Transmara Investment Limited.
The additional stake in Transmara Sugar was funded by cash available and a debt of US$5.05 million (Sh599.2 million) contracted by Sucrière des Mascareignes Limited.
Following the move, Alteo has announced plans to move its Kenya and Tanzania sugar production operations into a new investment vehicle, Miwa Sugar Limited, which was established earlier this year.
Alteo stated that the restructuring will allow the company to realize its property value creation strategy by establishing a governance and management structure focused on land management and development.
This is also in line with Alteo’s shareholders plans, who include Mauritian conglomerates CIEL Agro Limited and IBL Ltd, planning to move the sugar operations from the umbrella of Alteo and into their direct control under the new investment vehicle.
Alteo will thereafter concentrate on real estate development in Mauritius, according to the regulatory filings, with Miwa taking over its sugar production subsidiaries.
“One of the objectives of the restructuring is to better prepare Alteo to realise its property value creation strategy by setting up a governance and management structure which is more focused on land management and development, and enhancing the visibility on the contribution of the property cluster of Alteo to the return generated from the group’s assets,” said the firm in the IM.
It added that moving the sugar operators to Miwa will result in a governance and management structure focused on optimising the millers’ operations and their development, and improve their access to capital by targeting investors focused on the growth potential in Africa.
The restructuring follow’s recent IBl’s expansion activities in the East African region through strategic acquisition of shares in high-performing consumer goods and retail enterprises.
In June, the entity collaborated with French financier Proparco and German sovereign wealth fund DEG to acquire a significant share in Kenya’s top grocery chain Naivas International following the exit of investment fund manager dedicated to the African continent, Amethis and its other partners.