Kenya: The Government will sell a 26 per cent stake in Kenya Wine Agencies Ltd (KWAL) for Sh860 million to South African firm Distell Limited.
The Privatisation Commission on Friday said it had concluded negotiations with Distell for the sale of some of the Government shares in KWAL. The Government has a 72.65 per cent shareholding in KWAL that is held by the Industrial and Commercial Development Corporation (ICDC).
“The Privatisation Commission has completed negotiations for the sale of 26 per cent of the issued share capital in the KWA Holdings E.A. Limited shareholding held by ICDC,” said Solomon Kitungu, the director general Privatisation Commission, in a Gazette Notice. “An agreement has been reached between KWA Holdings E.A. Limited, ICDC and Distell Limited to transfer the sale shares to Distell Limited... for a consideration of eight hundred and sixty million shillings.”
The conclusion of negotiations comes after a delay of close to a year. The Privatisation Commission has in the past said the delay was because the South African investors wanted more time to consult and complete their due diligence work. The sale is on condition that Distell will give KWAL exclusive rights to distribute some its products in East Africa. Other conditions are the long term supply and distribution of products as well as production and bottling agreement between the two firms.
ICDC is looking at a total exit from KWAL in the coming years with an initial sale of a 26 per cent stake to Distell and a further four per cent ownership to KWAL’s employees. It will offload the remaining 42.65 per cent shareholding in the coming years. The commission that will oversee the sale is yet to determine the modality of disposing the remaining shares.
KWAL and Distell have a partnership for the distribution of Distell’s products in Kenya that include Amarula and Viceroy. The partnership has been in place for 16 years. This is in addition to the manufacturing of a range of both alcoholic and soft drinks at its industrial area plant.
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