By James Anyanzwa
Nairobi, Kenya: The Government has suspended the sale of Kenya Wine Agencies Limited (KWAL) shareholding to a strategic investor until the end of next month.
The sale of a 26 per cent stake to a South African firm, Distell, which was scheduled to take place by June 30, has been extended by two more months to August 31.
The Privatisation Commission (PC) said the extension is meant to give the investors more time to consult and complete due diligence work.
“The transaction has been extended to allow for more consultation and to complete the due diligence process by the investors,” Solomon Kitungu, the Commission’s executive director and chief executive told The Standard on Sunday.
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Kitungu said the offer price would be made public immediately the contract is signed.
The Government owns a 72.65 per cent shareholding in KWAL through the Industrial and Commercial Development Corporation (ICDC).
ICDC is seeking a total exit from KWAL over the next four years, with an initial sale of 26 per cent stake to Distell and a further four per cent ownership to KWAL’s employees.
The remaining 42.65 per cent shareholding is to be offloaded over the next four years.
KWAL and Distell have had a 15-year partnership for the distribution of Distell’s products in Kenya, which include Amarula and Viceroy. The sale will require Distell to give KWAL exclusive rights to distribute its products in East Africa.
The first phase, which would have seen ICDC sell a combined 30 per cent stake to Distell and KWAL’s employees, was to be completed on June 30.
Threatened to quit
“Sale of 26 per cent shareholding to Distell [will happen] through a negotiated and market driven process whereby Distell will sign a long term supply agreement with KWAL for the company to have exclusive rights for the sale of Distell products in Kenya and the region,” the PC chairman, Peter Kimuyu, said in a statement in April this year.
The PC, which is overseeing the sale of ICDC shares in the firm, is yet to determine the modality of selling the remaining 42.65 government shareholding in KWAL.
According to the commission, the sale of the balance of the ICDC shares would be done within two to four years once the value of the remaining shares has improved.
The sale of ICDC shares in KWAL follows a parliamentary approval earlier this year. It also comes after Distell threatened to quit its partnership with KWAL due what it said was a continued delay in the privatisation of KWAL, which it said was frustrating its strategic plans.
The plans to quit the partnership were not met with kindness by KWAL, which moved to court in September last year seeking an order to bar Distell from cutting ties. The two firms eventually reached an out of court agreement but refused to make public the terms of the settlement.
