AA Kenya chief talks up expansion and Nairobi bourse listing plans

AA Kenya CEO Francis Theuri during an interview on the growth and continuity. [David Gichuru, Standard]

Francis Theuri will not let the rich history of Automobile Association of Kenya (AA Kenya) spanning 100 years cloud his plans for the future.

He is focused on the next 100 years. And he has a roadmap. The kind that will see AA Kenya transform from an association to a limited company trading on the Nairobi Securities Exchange (NSE). Mr Theuri is, however, playing his cards close to his chest, not revealing the timelines on when the listing could happen.

“I will not want to comment on the listing, but I want to say those are discussions that have started,” he said in an exclusive interview with Financial Standard. Theuri mentions a notable investment bank as their transaction advisor for the process, adding that they have also engaged the services of a top law firm for legal advice.

AA Kenya promotes and safeguards the interests of motorists through a broad range of services, including roadside assistance, vehicle maintenance and repair and negotiation of affordable insurance premiums. It is the largest automobile association in Kenya with over 100,000 members and over 30 branches countrywide.

The AA Kenya chief said he is well aware of the foundation laid by his predecessors, from the association’s founding as the Royal East Africa Automobile Association in 1919 by Lionel Douglas Galton–Fenzi to when it shipped in a Riley 12/50 car model on loan in 1926, before becoming a driving school with just one vehicle in 1962.

“We realise that in 100 years, we have done very well by supporting this economy in terms of mobility, and we are looking at how much more we need to do in the next 100 years,” said Theuri.

“The next level will be very exciting. We will be taking care of the technology that is taking over the industry.” He said AA Kenya’s selling point is anchored on road safety as it looks to grow its current 35 branch network to every county headquarters in the country.  

“What does that mean? It means we have to raise capital. We also want to regionally expand into other African countries,” said Theuri.

One of the targeted countries for expansion is Rwanda. On the planned listing, he said AA Kenya needs to first structure its ownership in order to allot shares.

“We want to move from that mutual organisation to a company limited by shares through demutualisation,” explained Theuri.

“We are demutualising and in the process, we are trying to identify who is the owner of this organisation called AA Kenya.” He said the current members have until December 31 to confirm their membership after which the demutualisation process can begin.

Demutualisation is the process by which a customer-owned mutual organisation or co-operative changes legal form to a joint-stock company.

After this is done, the firm can then go into capital raising.

“What is more exciting is that the association has been performing very well in the past. When we look at the projects we have for the future, the performance can only be better,” said Theuri.

“Anybody who registers now and becomes part of the ownership of the organisation stands to benefit big time in terms of sharing in the profits, growth of their shares, and all other benefits available to our members,” he said.

Theuri said the lobby hopes to benchmark its operations with other associations in developed countries, leveraging technology use in its operations. “If you go to AA Australia, they have got like 26 rescue choppers. They have more than 1,000 vehicles on the road for rescue business… they are big… 70 per cent of the population are members of the association,” he said.

The Argentinian Automobile Association, he further noted, owns petrol stations and hotels.