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Tuskys takes over Nakumatt supermarkets

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Under the circumstances, Nakumatt has been staring at death as it lost customers to its rivals, mainly Tuskys, Naivas and Choppies as Uchumi is also facing a supplier revolt over delayed payments.

Tuskys supermarket has taken over the management of its biggest rival Nakumatt in what is seen as an attempt to rescue Kenya’s biggest retailer from collapse.

The two retailers are said to have signed a merger deal geared at helping revive Nakumatt whose shelves have been empty for a long time in a unique strategic deal between rivals. Nakumatt, with retail stores in Kenya’s major towns, will now access stock from suppliers using Tuskys supermarkets’ goodwill and value chain.

The brands will remain the same but Tuskys will provide managers to offer leadership. It not clear whether its a merger, buyout or just management partnership.

It is understood that Nakumatt Managing Director Atul Shah and his family have agreed to cede shareholding to new financiers. “This is a home grown solution. The deal will allow Nakumatt access stock immediately and once it has stock then it can get the cash flows to remain afloat,” a source familiar with the deal is quoted as saying by The Standard newspaper.

If the deal goes through and works out, it will be a huge boost for the Tuskys brand which could make it the biggest and most successful retail chain in Kenya today.

RELATED:  The real cause of Nakumatt’s problems

Nakumatt’s cash-flow problems have seen it taken to court and in some cases face the auctioneer’s hammer in Uganda.  The retailer has been unsuccessful in finding financiers to pump in cash to pay huge debts pulling it back.

Most of its suppliers have stopped deliveries, leaving most of its shelves empty, and forcing it to close some of its most affected branches including its newest high-end store at NextGen Mall on Mombasa Road. Under the circumstances, Nakumatt has been staring at death as it lost customers to its rivals, mainly Tuskys, Naivas and Choppies as Uchumi is also facing a supplier revolt over delayed payments.

READ: How TRM Mall kicked out Nakumatt

Business Today is the leading independent online business website in Kenya. Started in 2012 by a veteran business journalist, it has a huge following both in Kenya and abroad. It covers various business and related issues. Email editor at: [email protected]

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1 Comment

1 Comment

  1. Paul Owole

    September 18, 2017 at 11:22 am

    So sad that Nakumatt had to end this way…it was a very strong brand that could have move further beyond Kenya like its was in Uganda and Tanzania. Hope Tusky’s learn from its failures not to have them repeated.

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Mergers & Acquisitions

Longhorn to dispose stake in Law Africa Publishing

Law Africa Publishing Limited, a regional legal and paralegal publishing giant founded in 1999 by legal scholar Katarina Juma, will cease to be a subsidiary of Longhorn Publishers

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Longhorn Publishers has announced plans to sale 92% of its issued share capital to Law Africa Publishing Limited.

The proposal, which will be tabled shareholders at the Annual General Meeting on December 8, 2017 at a Nairobi hotel for approval, which pave way for the board to negotiate, prepare and execute any documents and make any arrangements and filings necessary to give effect to the deal, according to a notice issued by Longhorn Publishers.

The move follows receipt from a prospective purchaser of a letter of intent to purchase such shares, the company says.

Law Africa Publishing Limited, a regional legal and paralegal publishing giant founded in 1999 by legal scholar Katarina Jumawill cease to be a subsidiary of Longhorn Publishers.

During the AGM, shareholders will also be asked to approve the proposed sale of a parcel of land, LR 209/5604 owned by Longhorn Publishers.

Shareholders will also be required to decide on whether to re-elect Susan Nkirote Omanga, Raymond Nyamweya Ondieki and Truphosa Kwamba-Sumba who will require by rotation at the meeting but being eligible, have offered themselves for re-election.

 

In September, Longhorn Publishers announced a 29% increase in net profit for the 2017 full year to Ksh 134 million up from Ksh 104 million in 2016 which chief Executive Simon Ngige attributed to a decline in operating expenses and improvement in other markets that include Zambia, Malawi and Rwanda raking in 30% of the revenue.

The firm also recorded a 9% decline in operating expenses as turnover remained flat.

Going forward, Longhorn, which mainly publishes primary school text books, seeks to diversify into digital products, reference books and tertiary books  to mitigate potential risks around the changes in the Kenya school curriculum, which is anticipated to take effect next year.

READ: Stanbic unveils unit for the super-rich

“Our sales of digital products have more than doubled in the previous financial year. We have developed proprietary eLearning platforms and digitized over 300 products including Longhorn eBooks Store, Longhorn eLearning Platform, Kamusi Kuu ya Kiswahili and Kiswahili ya Karne ya 21 applications which are now available worldwide on various digital platforms,” Ngige said.

The firm plans to spend Ksh 200 million to digitise books in digital strategy.

The company has proposed a final dividend of Ksh 0.29 per share in respect of the financial year ended 30 June 2017 as recommended by directors, which would be payable on or before 7 March 2018 to shareholders of the Register of Members as at the close of business on 8 December 2017.

 

 

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Mergers & Acquisitions

Britam shareholders approve Sh5.7b AfricInvest deal

Group Managing Director Benson Wairegi says the funds would go to support strategic projects in the group, including the consolidation of the group’s leadership position across its various businesses

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Britam Plc shareholders have approved the acquisition of a 14. 3% stake in the company by private Equity Fund AfricInvest.

Following Friday’s approval, AfricInvest will now inject KSh 5.7 billion to buy 360, 888, 281 million new
ordinary shares of Britam at a subscription price of Ksh 15. 85 per share. Upon the completion of the subscription, AfricInvest will hold a 14. 3% stake of the issued ordinary shares of the company.

The subscription is awaiting approval from the Capital Markets Authority and is expected to be completed in the first quarter of 2018.

AfricInvest is a Pan African Private Equity fund which manages about US$1 billion in 14 private equity funds. It is a Special Purpose Vehicle (SPV) formed by a consortium of global investors from the Federal Republic of Germany, Netherlands, and France.

Since inception in 1994, AfricInvest has invested in 135 companies across 24 African countries in high growth sectors including financial services, agribusiness, consumer/retail, education and healthcare. Its most recent investments in the insurance industry are UAP Holdings (East Africa), Mansard Holdings (Nigeria) GAT Assurance (Tunisia) and UAB Life (Burkina Faso).

Speaking during a General Meeting of the shareholders at a Nairobi Hotel, Britam Group Managing Director Dr Benson Wairegi said the investment by the private equity fund makes AfricInvest a strategic partner in Britam.

READ: Govt takes control of Kenya Airways in debt swap

Dr Wairegi said the funds would go to support strategic projects in the group, including the consolidation of the group’s leadership position across its various businesses in insurance, asset management and property in line with the company’s 2016-2020 strategy.

“We chose to partner with AfricInvest because of their deep financial sector knowledge as well as their extensive experience working with insurance firms across the continent both of which we hope to leverage. We also believe that this partnership will result in unlocking higher shareholder value. The coming on board of AfricInvest into Britam also gives us confidence that the company
is on the right track,” Dr Wairegi said.

The decision by AfricInvest to invest in Britam comes less than a month after the IFC released Ksh 3.6 billion to fund strategic projects in the company. Both the IFC and AfricInvest subscribe to high international standards of corporate governance and sustainability.

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Mergers & Acquisitions

Convergence Partners acquires stake in ESET East Africa

The Pan-African ICT investor will now be involved in developing the opportunity for growth for ESET in numerous East African countries

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ESET East Africa CEO and Director, ESRO Limited Alistair Freeman with Geoffrey Gitau of Smart Edge Technologies at the ESET Kenya end-year cocktail dinner held at the Jacaranda Hotel on 9th November 2017.

Pan-African ICT investor, Convergence Partners and ESRO Limited have announced at the just concluded, annual AfricaCom conference in Cape Town, a recently concluded acquisition of a significant minority stake in ESET East Africa by Convergence Partners.

ESRO Ltd are the ESET distributors for the East African region. With its acquisition of a stake in ESRO Ltd, Convergence Partners will now be involved in developing the opportunity for growth for ESET in numerous East African countries.

To date, the focus has been on Kenya with a recently established ESET Kenya office to ensure the support for local partners is optimized.

“In the emerging native cloud environment coupled with edge computing, data is becoming more vulnerable and we have witnessed increased vulnerability of public and private data repositories to cyber threats and attacks. Cyber security solutions like that offered by ESET are a critical line of defense. We are excited to partner with ESET in this journey,” said Andile Ngcaba, founder and Chairman of Convergence Partners.

The benefits of the new relationship with Convergence Partners will be impactful for ESET Kenya, as their recent entry into the local market will be backed by the established Pan-African presence which Convergence Partners brings to the partnership.

“We are delighted to welcome Convergence Partners as key new shareholders to our business. With a strong emphasis on channel and relationships, we share a vision on growing local cyber security skills in Kenya and together will further develop the ESET brand and distribution opportunities in East Africa. In particular, their portfolio of investments in telecommunications and value-added services offer an important distribution vector for us in these countries,” said Alistair Freeman, Director of ESRO Ltd.

READ: Equity Bank CEO James Mwangi’s take on brands boycott

The ESET range of multi-award-winning security software has been distributed in the Southern African region as a recognized brand for 15 years.  Emphasis has always been placed on top quality customer service and channel support, underpinned by ESET’s strong brand and reputation for excellent products.

Miroslav Mikus, Sales and Marketing Director for Europe, Middle East and Africa at ESET said “We welcome Convergence Partners aboard ESET’s business in Southern Africa – a market which has long been our strongest presence on the African continent. We look forward to continue winning the trust of users in East Africa with the best quality cyber-security protection and the help of both Convergence Partners and ESET East Africa to increase the market share of our products.”

 

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Insurance

CapitalWorks buys Aon stakes in Sub-Sahara Africa

The transaction spans across 10 countries and regulatory approvals have thus far been obtained in Kenya, Lesotho, Malawi, Namibia, Uganda and Zambia (SEE STORY BELOW)

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Minet Africa Chief Executive Officer Joe Onsando, Capital Works Principal Partners and Minet Africa Chaiman Gath Willis, and Minet Kenya Chief Executive Officer Sammy Muthiu look through a document following the unveiling of Minet Kenya. This is as a result of change of ownership structure in the company’s operations in several countries across sub Saharan Africa following acquisition of Aon’s shareholding by Capital Works.

Private equity firm, CaptalWorks, has completed the process of acquiring Aon’s shareholding across certain sub-Saharan operations and will now be operating as Minet Africa.

 The transaction spans across 10 countries and regulatory approvals have thus far been obtained in Kenya, Lesotho, Malawi, Namibia, Uganda and Zambia, with the approvals for the remaining countries expected in the first quarter of 2018.

 “In February 2017, Aon plc announced its decision to change the ownership structure of its operations across several sub-Saharan countries. The various conditions have now been fulfilled and effective 3 November 2017, Aon’s African operations was transferred to Capitalworks,” said Minet Africa Chef Executive Officer Joe Onsando.  

 The new group will trade as Minet, a well-known and trusted brand across Africa, and will become Aon’s largest Global Network Correspondent. Aon employees in these countries as well as key senior leadership, who have extensive industry experience and knowledge of our clients’ operations, will remain part of the operations that Capitalworks is acquiring, ensuring leadership, continuity and stability for clients and colleagues alike.

 Mr Onsando said Minet is poised to benefit from Africa’s growth and that the company would embrace new technology and innovation to expand its footprint in Africa.

 “The conclusion of this transaction marks a historic milestone for Africa. Our industry finally has its own Pan-African player with a diverse African footprint, owned and led by Africans,” Mr. Onsando said.

“The time has come for our African team to take the business through a new growth trajectory. This is the beginning of yet another exciting chapter in our business. It is an affirmation of the tireless efforts they have put into building and growing the company over the past 70 years.”

 With a growing consumer market and a population that has surpassed 1.2 billion, Africa is now one of the fastest growing regions in the world. The African Economic Outlook, co-authored by the African Development Bank, the OECD and the United Nations Development Programme, expects the continent’s economy to grow by 3.4 percent in 2017 and 4.3 percent in 2018, up from an estimated 2.2 percent last year. The growth will be buoyed by a sustained recovery in commodity prices, a recovering global economy and the return of risk appetite among global investors.

 John Cullen, CEO of Aon Risk Solutions in EMEA said with Capitalworks, Aon Group had chosen to partner with an investor with a sound understanding of local market conditions, strong governance and operational experience.

 “The combination of Capitalworks’ track record in the region, backed by Aon’s global expertise, leverage and economies of scale will bring clear benefits for our clients,” Mr Cullen said.

READ: Airtel hits at Safaricom with #RESIST offer

Minet Group’s Chairman, and Principal at Capitalworks, Garth Willis, says: “We are excited about investing in a world-class operation which is one of the leading players in Africa. We will be working alongside management to build on the Aon heritage as a trusted partner to clients in protecting the future of their people and assets in Africa.

“We are specifically looking to take advantage of opportunities to find solutions for the various local market needs and securing Africa’s growing middle class. Capitalworks is looking forward to partnering with the Minet management team that has grown the Group to be the largest risk and human capital advisory network on the continent.’’

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