Category Archives: NSE investments

Seaboard and Victus offer to buy out Unga shareholders

Seaboard Corporation of Delaware, acting in conjunction with Victus Limited, the majority owner of Unga Group, has offered to buy out other minority shareholders at Kshs 40 per share and de-list the company shares from the Nairobi Securities Exchange.

Seaboard of Delaware, owns 2.92% of the company, while  Victus, a Kenyan investment company, owns 50.93% of Unga. The turnaround of Unga can be attributed to a strategic partnership with Seaboard and their management of the company. Going by revelations at past company annual general meetings (AGM’s), Seaboard has lent the company funding, and is paid an annual management fee that escalates as Unga gets more profitable.  Keen Unga shareholders have also known for years that Seaboard has a right to acquire a majority stake in Unga.  

Still, the offer of Kshs 40 per share, which value Unga at Kshs 3.03 billion, and which the Seaboard promoters state is a premium (33% above Unga’s current trading price of Kshs 30) is rather low. The share was trading at Kshs 44 per share two years ago, and one investor puts the company net asset value as at June 2017 at Kshs 52 per share, which will have gone up with the recent rise of the NSE later in the year.

Kenya’s Money in the Past: Nairobi Stock Exchange in 1997

What companies were listed on the Nairobi Stock Exchange, twenty years ago, in 1997? A chart of listed shares appeared in Financial Review which was a popular magazine that featured business, and later political stories.

Still Listed
BAT Kenya
Bamburi Portland Cement
Barclays Bank of Kenya
Car & General
Carbacid Investments
Credit Finance  (later CFC, now Stanbic?)
Diamond Trust
Dunlop Kenya (now Olympia)
Eaagads
East African Breweries
East African Cables
East African Portland Cement
E. A. Oxygen (now BOC)
Express Kenya

ICDC Investment (rebranded as Centum)
Jubilee Insurance
Kakuzi
Kapchorua Tea
George Williamson (Williamson Tea)
Kenya Oil (Kenol)
Kenya Power & Lighting
Limuru Tea
Nation Printers & Publishers (now Nation Media Group)
National Industrial Credit (now NIC Bank)
Pan Africa Insurance (now Sanlam Kenya)
Sasini Tea
Unga Group


De-Listed 
CMC Holdings
A. Baumann & Co
Brooke Bond (became Unilever Tea)
Hutchings Biemer
Elliotts Bakeries
Kenya Orchards
Marshalls
Ol Pejeta Ranching
Timsales
Uplands Bacon Company

Gone
African Tours & Hotels (now Kenya Safari Lodges)
Chancery Investments
Consolidated Holdings
City Brewery Investments
E. A Bag & Cordage
E. A . Packaging
E. A. Road Services
Kenya National Mills (absorbed into Unga)
KCC (there’s now New KCC)
Motor Mart & Exchange
Pearl Dry Cleaners
Philip Harrison & Crossfield
Sofar Investments
Theta Group

This Standard article explains what happened to some of the companies. e.g. City Brewery manufactured City Lager beer, and Theta was a tea factory while many others were bought out or went out of business,

Also, see Who Controls Industry in Kenya in 1968. 

Uchumi Rights Issue: CMA Acts – Part I

Yesterday the Capital Markets Authority (CMA) meted out punishment, following the Uchumi Supermarkets (USL) rights Issues.

Back in 2014. Uchumi’s rights issue to raise Kshs 895 million ($10 million) by offering shareholders 3 shares for every 8 held at Kshs 9 per share, with the funds to be used for expansion in East Africa and refurbishment of stores.

(Excerpts from) The CMA statement reads:

  • The regulatory breaches of the former directors and the two USL officers were identified in respect of the period of 2012 – 2015 and involved making changes to the Information Memorandum (IM) after CMA approval; failing to make proper disclosure of material information to inform investor decision making; misapplication of Rights Issue (RI) proceeds; mis-statement of financial statements in 2014; weaknesses in board oversight of the branch expansion programme; inadequate conflict of interest management; and inadequate disclosure of asset sale and leaseback arrangements. The breaches of the transaction advisor revolve around not ensuring changes made to an approved IM were submitted to CMA for further approval.

Also that

  • Out of the Ksh895 million right issue proceeds received by USL in January 2015 it was established that a small portion was used to pay the rights issue expenses but the balance was transferred to the trading account from where payments were being made to settle outstanding suppliers’ debts as opposed to funding branch expansion.

And

  • With respect to the financial statements for the period ended June 30, 2014, that were used to support the Right Issue, it was established that a Ksh350 million asset sale and lease back transaction was recognized, while the agreement for the same was signed and funds received in September 2014 . As a result of this recognition, USL’s profits as at June 30, 2014 were enhanced by Ksh19.97 million arising from the gain on sale of the assets. Further, the USL liabilities were understated to the tune of approximately Kshs.1 billion. The Board subsequently reversed this treatment in the audited accounts in 2015, stating that this recognition had been premature.

Other recent actions by the CMA have targeted directors of Imperial Bank and CMC Group.

Olympia 2016 AGM: Turnaround? Part II

Olympia Capital held it’s 2016 AGM in in Nairobi on Monday. It was a brief meeting at the 680 Hotel during which the board promised they had turned the company round and expected to pay a dividend next year and be on time with their financial reports.  They will announce their half year results, in two weeks, and the CEO said their (unaudited)  business in Botswana was their best investment,  while  South Africa was a disaster where they had lost a lot of money.

Pic from the CBK website.

We don’t want cents

He said, 17 years after they made the deal, 50% of the company business is now from outside Kenya, and even though the Botswana Pula had major exchange rate swings they expect  Kalahari Floor Tiles to pay an interim dividend which will be passed on to Olympia shareholders as a full year dividend.

Shareholders questioned the company’s debts, investment decisions & classification, the absence of the chairman’s report from the accounts and a decision to de-list a subsidiary in South Africa to protect it from creditors.  On the, promised dividend, shareholders said that they want shilling dividend payments, not cents.

PLC company names in Kenya

BAT Kenya is the latest company to change its name to PLC. Others have been KCB and CFCStanbic, earlier this year.

This comes from the Companies Act which was enacted  late in 2015 and which has a clause that read  a company that is both a limited company and a public company may only be registered with a name that ends with the words “public limited company” or the abbreviation “plc”.  The old limited (‘Ltd’) that most companies will now be reserved for company that are private companies.

So expect all NSE-listed companies to adopt the change from Ltd to Plc.