ETHIOPIA – The state-owned manufacturer, National Alcohol & Liquor Factory (NALF) has received US$131.3 million acquisition offer from Lominat Beverage in the government’s move to privatize the company.
Lominat Beverage Plc, also reported by the Fortune to be constructing a beverage bottling company in Modio town, offered the highest bid ahead of Pure Beverages Plc, a distributor of non-alcoholic beverages which had provided US$62.02m.
Also among the 97 bidders that purchased the bid document and submitted their offers was Metadel Manufacturing Plc, who proposed to buy the company for US$54.72 million, all the three proposing to pay 35% of the bid price then pay the remaining in five-year instalments.
NALF is ranked third in obtaining the highest offers among companies that have been privatized including National Tobacco Enterprise, acquired by Japan’s Tobacco International (JTI) for US$500m.
Meta Abo Breweries S.C, a manufacturer and marketer of beer is the second ranking after it was sold to Diageo Plc for US$225 million in 2012.
Asella Malt Factory was the latest company to grab one of the highest offers for privatization when it was acquired by Oromia Agricultural Cooperative Federation for US$48.8m in March this year.
The company’s four plants located in Mexico Square, Elber Alcohol Factory in Aqaqi, Sebeta Alcohol Factory in Sebeta and a warehouse in Mekanisa were nationalized during the Dergue regime after they were acquired from its founder Elias Papasinos.
An attempt to re-privatize it in 1995 failed after the former Privatization & Public Enterprises Supervising Agency claimed doing so would result to monopoly in the market.
The tender to privatize the company was announced in April amidst a misunderstanding between the government and former owner Berhane, who from the beginning has opposed such moves.
The opening of the bid was later postponed to June 19, 2018.
“We had postponed the final opening of the bids following bidders’ request who required additional days to prepare,” said Dawit Tefera, director of Investment Administration & Privatization at the Ministry of Public Enterprises (MoPE).
According to the Fortune, NALF has an annual production capacity of 30,000lt of liquor and last year, it realised profits of up to US$22.26m with US$8.14m in paid-up capital.
The founders of Lominat claim that they were interested in acquiring the company with the aim import substitution of liquor products into the country.
“The plant and the brand deserves a good chunk of money,” the company’s co-founder, Brook Worke told Fortune.
“We made a prior assessment.”
Commenting on the offer, Mesfin Abate, the deputy CEO of NALF said, “The privatisation is for the better of the factory,”
“It will be profitable and efficient under the new ownership.”