NSE Moment: Buyouts, Vultures, Divestments

A look at recent deals at the Nairobi Securities Exchange (NSE) and other privatization and equity bids since the last update. 

Divestments

Essar released a bombshell from India that they would be abandoning their investment in the old Kenya Pipeline Refineries and sell their stake back to the Kenya Government for $5 million.

At the same time a Receiver Manager put up (the closed) Pan African Paper Mills up for sale, but that is likely to be complicated by links the company had with vulture funds who purchased Panpaper’s debts in the international secondary debt market.

These faceless entities — basically different mutations of one group (going by the names like Noon Day Asset Management Asia and Farallon Capital Institutional Partners) — and 11 such firms  own 37% of the company’s debt.

The Essar fallout prompted Parliament  to also look into the mystery of Orange Kenya which keeps asking for more government support even as the government loses equity in the company.

Since then, the government announced that a new office will advise the government on  state investments: Attorney-General Githu Muigai said the Government Transaction Advisory Services Office will guide state deals with the aim of sealing opportunities where the latter has been losing its shareholding in parastatals without monetary gain.

  
EDIT: Another divestment is Kenya Wine Agencies Limited (KWAL) finally exiting Uchumi after disposing off all its shares. It had 18% in 2004 and 4% in 2012. - via @NSEKenya 

Done Deals

Recent M&A deals approved by the Kenya Competition Authority include:

Agri-Business:  The  acquisition of Juhudi Kilimo (turnover of Kshs 30 million) by Soros Economic Development Fund.

Aviation: The acquisition of Lady Lori Kenya by Ian Mbuthia Mimano, Adi Vinner and Peter Nthiga Njagi.

Education: The  purchase of 60% of Safer World Investments by School Operators Limited (owners of Peponi School) (The two will have a combined turnover of Kshs 672 million or ~$8 million)

Finance & Banking: The acquisition of Francis Thuo & Partners by Equity Investment Bank.

Food: The acquisition of 66% of Coca-Cola Juices Kenya by the Coca-Cola Export Corporation.

The  acquisition of Lonrho PLC by FS Africa  (as part of a $280 million deal in South Africa).

The acquisition of Ma Cuisine by Harper Holdings.

Health: The acquisition of Jampharm Chemist by Viva Afya (the two have a combined turnover of Kshs. 19.5 million).

  

The acquisition of Ascribe Group (which has a turnover of Kshs 70 million) by Emis Group.

Deals Bubbling

Brookside Dairies have taken over Buzeki, the makers of Molo Milk, in a Kshs 1.1 billion ($13 million) deal that increases Brookside’s share of the dairy market to 44%. 

EDIT GAZETTE NOTICE No.  15068 - THE TRANSFER OF BUSINESSES ACT


NOTICE is given that the furniture, fittings, fixtures and the assets and the stock being the business of manufacturing and selling of milk and milk products owned by Buzeki Dairy Limited (the “Transferor”) on the premises situated at Ganjoni, Mombasa have been sold and transferred by the Transferor to Brookside Dairy Limited who will carry on the said business of manufacturing and selling of manufacture of milk and milk products at the premises of Brookside Dairy Limited under the name and style of Brookside Dairy Limited (the “Transferee”) with effect from 1st November, 2013 (the “Completion Date”).


The address of the Transferor is Post Office Box Number P. O. Box 85532-80100, Mombasa, Kenya.
The address of the Transferee is Post Office Box Number P.O. Box 236–00232 Ruiru, Kenya.

The Transferee is not assuming nor does it intend to assume any creditors or debtors of the Transferor incurred in connection with the purchase and business of the assets of the Transferor up to and including the Completion Date and the same shall be paid and discharged by the Transferor and likewise all debts and liabilities owing and due to the Transferor up to and including the Completion Date shall be received by the Transferor.

Dated the 5th November, 2013.

KIPKENDA & COMPANY ADVOCATES,

Advocates for the Transferor.

COULSON HARNEY ADVOCATES

Centum shareholders approved new investments in Liberty Beverages, Mvuke Power, Two Rivers Lifestyle Centre, Centum Share Services, Centum Asset Managers (who are buying Genesis Kenya)  and the acquisition of 79% of Kilele holdings.

Africa Media Venture (AMVF)  a Dutch-based venture capital firm has raised its stake in a Kenyan restaurant guide website, EatOut, from 25% to 32% for  Kshs17 million ($200,000) in a transaction that values the online portal at Kshs. 220 million.  

Lonrho is selling it's entire stake (11%) in African airline Fastjet. 

Crystal Ventures (owned by the Rwanda Patriotic Front) plan to sell their 20% stake in MTN Rwanda, in an IPO which will make MTN Rwanda the third company listed on the Rwanda Stock Exchange after Bralirwa and Bank of Kigali.

Sameer Investments is buying out 41 million shares that Bridgestone owns in Sameer Africa – after which Sameer will own 159 million shares equivalent to 72% of the company.

Across the border, Tanzania's Precision Air is looking for a government investment, just a year after an IPO which raised $7 million and reduced the shareholding of Kenya Airways from 49% to 35%

Unga Group will acquire Ennsvalley Bakery for Kshs 125M ($1.5 million) and also dispose of shares in Bullpak.

EDIT: Kestrel Capital has arranged a $1.2 million private placementof convertible debentures in Stockport Exploration to local Kenyan qualified investors. Stockport is listed on the Toronto Stock Exchange and has mining interests in Nyanza Kenya where they are exploring along a prolific gold-hosting greenstone belt. Zeph Mbugua, the Chairman of TransCentury, became a director of Stockport in February this year. 

EDIT:  Swedfund, the Swedish state’s venture capital company, and The Africa Health fund through The Abraaj Group, a leading investor operating in global growth markets,  made a $6.5 million investment in The Nairobi Women’s Hospital, a leading private health care provider for women and their families (men and children) in East Africa.

Shareholder Restructurings

Businessman Christopher Kirubi is acquiring an additional 32 million shares in Centum Investments (for ~$8.6 million) which will raise the stake he controls to about 30%. and has received  an exemption from complying with the NSE requirement to make a take-over offer.

After listing at the NSE, I&M shareholders have done a swop to bring the company's investors numbers past the 1,000 shareholder mark.

  

The WPP Group (through Cavendish) is increasing its shareholding in Scangroup from 33% to 50%.  WPP is the largest  advertising group in the world is strengthen its control of Kenya and the East African market ahead of the merger of the Omnicom the No 2 firm, Omnicom (owners of TBWA) and No 3 – Publicis (of France) advertising firms – which when combined will be larger than WPP.

De-Listing's – Companies leaving the NSE 

Access Kenya Group after their buyout by Dimension Data was approved by the Government

CMC  at the conclusion of a  buyout offer from Dubai’s Al-Futtaim Group  who have offering Kshs 13  a share, or about $90m. 

The Dubai-based conglomerate, which holds lucrative distribution rights for Toyota and Honda in its home market, will help the struggling Nairobi-based automotive group expand its brands beyond its existing stable, which includes Volkswagen, Ford, Mazda and Suzuki.

R.E.A. Trading, which owns 56%  of Rea Vipingo Plantations has offered to buy out all other shareholders at a prices of Kshs 40 per share, representing a 43% premium. The shares that have since been suspended from trading and will be delisted from the NSE if the deal succeeds.

Stalled Deals

There was a Financial Times (FT)  article on queues forming to buy up East African retailers but deal opportunities at Nakumatt and Naivas have been hampered by some shareholders challenges of family and reputation.

Centum 2009 AGM

The Centum 2009 shareholders annual general meeting was held on Friday July 17 2009. Their last meeting I attended was 1½ years ago in February 2008 when ICDCI (changed its name) and became Centum. a quick Google search reveals other companies around the world with a similar name. So shareholders were right when they pushed for a more authentic, African name

AGM recap: From reading the minutes of the last shareholder meeting seems there was quite a bit of drama at the company’s last AGM in January where the independence of directors was questioned, and there were some interesting director elections whos resulted were polled and motions by some shareholders to remove two directors - (Chairman James Muguiyi and businessman Chris Kirubi) flopped. Most media reports however dealt with the delayed AGM and the payment of dividends at the door, but the best recap of that comes from the Nation

Bored this time: This was one of the longest AGM’s I have been to in a while. The Chairman and the CEO of the company each give long speeches about the company, that easily took up almost 2 hours - giving views on the performance of the company and future outlook as relates to the corporate bond they are about to launch.

Centum Performance their investment book is worth 6.5 billion (($84 million) down from 8.1 billion the year before. Reasons for decline were gains on disposal totaling 311 million, and further impairment of Rift Valley Railways (RVR) shares 271 million.
- The portfolio is consists of : 25% is KCB shares, General Motors East Africa 25%, Insurance 19%, 4% is publishing (a 35% stake in Longhorn), Beverages is 24% (includes shares in EABL, and several coca cola franchises), Services is 4% (includes 0.1% of Safaricom, and shares in NAS, and RVR), and 5% is a newly acquired (23% stake) of Carbacid . some values are KCB Kshs. 1.84 billion, GM 978 million, UAP 877 million, Nairobi Bottlers 660 million, KWAL 263 million, EABL 426 million, Mt. Kenya Bottlers 209 million
- Target is to have administrative costs at less than 2.5% of their assets. 2009 was 123 million (1.5%) and 2008 (136 million = ~1.6%), which includes cost of staff, running company, shareholder costs etc. striking a blow to companies that say public shareholders are expensive to administer
- On RVR: board maintains that it is still good company, had bad management. Once new deals are signed, new technical partners and this will see $50 million invested in the company. Fundamentals are still good, lots of foreign investor interest on the company, and it will be wrong to walk away when the value is down

Corporate Bond: Centum will be launching a corporate bond to raise Kshs 2 billion (~$26 million), reasons given include
- It’s the right rime, Safaricom and Kengen about to launch, while a recent bond from CFCstanbic bank was over-subscribed. After prospectus and approvals, it will be marketed to pension funds, institutions, insurance companies, even shareholders can subscribe
- Current borrowing costs at 170 million out of 6.5 billon assets are very manageable. Their dividend flows are not consistent, so they sometime need overdrafts, but can’t grow the business on overdraft. The Bond will add some long term funds to balance sheet
- They have a pipeline of investments lined up, and what is a bad market for others is a good time for Centum to buy into companies. Funds will be invested 60 – 70% in private companies, 20-30% in listed companies and 0.15% in real estate. They already signed the deal for Carbacid for about Kshs. 400 million that was done through Rasimu Limited, a new wholly owned subsidiary
- Bond is better than bank debt, cheaper, long term, more flexible. It will cost 9.5% to 12.5% per year

Image Centum plans to expand into Africa from Kenya and their vision is to be Africa’s foremost investment channel. Chairman mentioned that their name brand is important, and regretted that bad press had seen the share price dip

Voting: The voting was done by ballot, and the auditors will tally the results. So at the meeting, motions in the agenda were proposed and seconded, with shareholders asked to mark ballot forms and leave them outside after meeting for votes to be tallied. With the new registrars CRS, voting by this method could become the norm, especially on controversial votes, where shareholders numbers at the annual general meeting can be canceled out by real tally of proxy votes. That was the case at the January meeting, where the 1,536 shareholder attendees (with 258 proxies) tallied yielded just 1% in the re-election the directors.

Missing the Centum party

(EDIT: Centum's official Press release about the AGM)

When I last looked at Centum, company was in the news due to CEO exit and a postponed AGM and postponed dividend.

Now it appears the AGM took place yesterday: I did not attend as I (i) had sold my shares (ii) did not see invitation document before today (iii) forgot all about Centum AGM

From today's reading, Centum sent out an annual report with updated sections but still the financial accounts for nine months to March 2008: it now includes mentions of departures of Isaac Awuondo (September 08), and CEO Peter Mwangi (October 2008) which coincided with the postponed AGM, and also welcomes on board new directors - Kibuga Karithi (September 08) , Imtiaz khan (November 2008 - Cassias capital partners) and new CEO James Mworia (appointed October 2008, joined board December 2008) who came on board a week after Mwangi left - for greener pastures where he’s now the CEO of the Nairobi Stock Exchange (NSE)

No agenda: The invitation letter dated on 1st December 2008 mentiones a shareholder presentation woudl take place on Thursday at 10, followed by the AGM at 11 - but no meeting agenda was contained.

The report also states that the (Centum) board believes that annual general meting provides an appropriate forum for investors to communicate with the board and encourages participation

Dividend day A company statement from October had mentioned that dividend would be paid at the January 14 AGM

So what happened?

Anonymous Comments posted yesterday include

Anonymous said... You gave the Centum AGM a skip???!! Here I was looking forward to a post on that.
Part of the drama was that the company's attorney denied a proxy audience on the grounds that co. law does not expressly provide for proxies to be heard at an AGM. I wonder how corporate s/holders are supposed to voice their concerns at AGMs in that case?
Interestingly, a special agenda to have two directors (the Chairman and Chris Kirubi) removed was in the cards; no need to wait for the result of that coz its sure to flop since their stake in the co is significant.

Anonymous (New CEO) MainaT - I think he's off to a good start. He managed the anti- C.K s/holder sentiment as best as these things can be managed i.e. by requesting the co. attorney to give an (erroneous) interpretation of co law to diffuse the anti C.K sentiments that were beginning to spiral out of ctrl.

Anonymous said... Centum don't have an in-house co. attorney. They must have hired whoever was turning proxies at the door. Their co. sec. is not attorney. Curiously, did they send the annual reports without the proxy forms? Extremely strange. Very strange. CMA should take a peek at this. Some one should write a stinker, otherwise, minority views will continue to be suppressed.

any more comments? and was the dividend paid or just declared?

Toxic Centum Last time Centum was in the news their CEO had departed, and Discount stockbrokers had collapsed. This time the news cycle is topped by the Triton fuel scam and the departures of the Chairman of the Capital markets Authority Chege Waruingi and Kenya Airports Authority CEO George Muhoho - (more from "airport expert" - Coldtusker )

Mostly Centum

Last week the company CEO departed and the Centum (formerly ICDCI) directors postponed the annual general meeting (AGM) and payment of the year end dividend.

Today’s newspaper has a statement from the Centum Board asserting that:
- The management is firm, the company is on sound financial footing, and the departure of CEO Peter Mwangi had no relation to the delayed dividend and meeting. However, while Tony Wainaina (Mwangi’s predecessor) and Mugo Kibati (EA Cables) may have set a precedent for young CEO’s to enhance corporate performance and value and leave at the top, the timing & coincidence is not good.
- Statement does not address delay of the dividend which would amount to about Kshs. 248 million ($3.3 million). Without doubt, the conpany's investment portfolio is down this year (quoted investments - which should be easily disposable include about Kshs. 1.5 billion of KCB (but down from 2 billion ), Kshs. 422 m of EABL and probably a healthy slice of Safaricom) - but it’s scary that three months after a company declared a dividend, it would find itself unable to fund it.

Toxic broker:
- Centum’s statement adds that its listed holdings are not accessible to any (rogue) stockbroker, and the company had no dealings with Discount Stockbrokers
- A separate from the CMA statement today effectively states that the company is under receivership by KPMG – owing to corporate governance including poor strategies manifested by an unsustainable expansion plan (branches all over the country)
- A bigger scandal than Discount appears to be at the national Social Security Fund (NSSF) whose dealings with Discount are a lesson for fraudsters.

Best Kenyan corporate site
In the wake of hiding from questions on Discount, the Centum statements along with financial results from listed companies (Kengen, EA Cables and KPLC) have appeared in the newspapers before they were posted on the NSE site. And though the NSE won an African Investor award (for 2nd runner up - most innovative African stock exchange) website updates should be a priority matter

Probably the best bank, and perhaps corporate site in Kenya, with the most relevant, timely, updates has to be the Central Bank of Kenya website with their controversial/pro-active governor Professor Njuguna Ndung’u (and his media team) who post several statements, speeches, policy matters a week (read it and judge)

Co-Op IPO: After a stop-go debate the Co-op Bank IPO has been green-lit and will begin in about a week’s time with investors still digesting refunds and possible losses from the previous IPO – Safaricom.
Dates: October 30 - November 13
Share price Kshs. 9.50 ($0.13) each (for 701 million shares)

Related Posts
- Reasons to invest in Co-op IPO (or not)
- The last Centum AGM (February 2008)
- Saying farewell at AGM’s: in style (Barclays) or in shame (Kenya Airways)

Barclays numbers

Kenya’s’ largest bank is first out of the door with year end announcement for what is expected to be a record profit year

Coldtusker used to run a financial gaffes, column and all the news outlets went with Barclays reported growth of 9% in pre-tax profits, when it was actually 7% (to about $101 million) from 2006.

The dividend was the same at 2006, you can expect good results in years to come, when the expansion pays offs (not in 2007 where expenses grew faster than income (37% to 24%). They threw all their funds into loans - up 43% in 2007; compare these results to 2005-06 when assets and loans were up 13% apiece.

Another news gaffe goes to the Standard who referred to a company called Centrum in their Saturday newspaper report on ICDCI’s name change to Centum Investments. The name confusion will continues for ex-ICDCI as long as spell checks are used.

ICDCI AGM

Shareholder woes: My first AGM this year is that of ICDCI which was held on Thursday February 21 at the Safari Park Hotel.

Sometimes it’s painful to be shareholder and today was one of those days. I’m out of practice and forgot to check in early – and arrived at the Hotel at 11.m. sharp only to find a very long queue outside. It would have been better to be a proxy today as that queue moved faster. But the company had only four computer stations to register any of its 40,000 shareholders who showed up – and I didn’t get processed till noon after spending an hour standing in the hot sun.

The meeting was almost over and I was able to catch a few comments by the MD and the Chairman of the company:

- On property: they sold two buildings in Nairobi, but are going to invest in the real estate sector again – and develop a building on a plot in downtown Nairobi
- On Eveready: it has not performed well (for shareholders) but by going public they are now able to liquidate part of their shareholding
- On Rift Valley Railways – its long term investment, but they hope to get return on the investment within 4 years
- On company’s sustainability in these tough political times- aim to diversify regionally, to minimize country specific risk
- one shareholder complained about late delivery of the meeting invitations & company accounts (through the post office) and the Chairman answered that they are concerned about the cost of printing and distribution of the company accounts – they may print abridged ones in future and e-mail others or put them on their web site

Hot Button issue was the proposed name change of the company from ICDCI to Centum Investments: almost all shareholders who spoke, on the matter opposed the name change of the company – some saying old is gold, new name is not African and can’t be translated, they don’t want to lose identity etc.

The Company Chairman was at pains to explain when one director Mrs. Pauline Muriuki stood up and exhorted shareholders to approve the name change. She said the company wanted to differentiate itself from (former parent) ICDC, and also Uchumi and the Government – saying negative stories/Matope that involved these companies affect the ICDCI share price. She also mentioned that the shares allow the company to go international (will be listed on the Uganda Stock Exchange. She said other companies had changed their names to reflect their new identities and had succeeded thereafter such as Unilever.

She was clearly worried as the company had already put in place a multi-million campaign for the new name which was yet to be revealed (a launch dinner to be held today but unfortunately coincided with the launch of CNBC Africa in Nairobi and was canceled) - also the company had already printed out shirts and gift items for shareholders with Centum to take home after the meeting

Is there shareholder democracy? : The Centum matter was eventually put to a vote on the floor, and passed, but the Chairman failed to ask if there were any opposers to the name change. The matter should actually have been put to a vote (with physical ballots). But would it have mattered anyway (since directors - businessman Chris Kirubi and ICDC (23%) combined own 50% of the company’s votes). Still it was a warning that companies should not take shareholders votes for granted

Goodies: Centum branded polo-shirt, tote bag and calendar. The Hotel had prepared a buffet lunch that was bland, and the company may have been better off handing out packed lunch boxes as the shareholders were unruly as they queued for the gifts and food

ICDCI now Centum Investments

name change
The former ICDCI will officially become Centum Investment Company Ltd. at the end of the month after the company’s AGM – ending years of confusion with ICDC – its former parent company.

Other than the name change, they are also adjusting their financial year end from June to March which means the year 2007-8 will end in March 08 – just 9 month long).

Last year was active for their investments, but the abbreviated year results could be badly hit by the post-election events. They had acquired shares in KQ, KPLC, Mumias, lightened on Eveready (largest shares block now KCB, Kenya Airways, EABL and Mumias) and sold off real estate (Kimathi House and Consulate Chambers) to improve liquidity. On the unlisted front, they acquired 10% of Rift Valley Railways (and will acquire another 10% from IFC over the next four years) and increased their stake in Kisii bottlers to 24% - so unlisted portflio is mainly two insurance and four coca cola bottling companies.

Bank for sale

The Government intends to sell a portion of Development Bank of Kenya (DBK) to a strategic investor.

The goverment, through ICDC owns 90% of the Bank which was almost merged with Housing Finance in 2005.

DBK is Kenya's 34th largest bank with assets of Kshs. 3.9 billion ($55 million)

Economic Matrix

watch me inflate my salary while dodging taxes

This week has been spent learning the ropes of learning new core banking system. We are in a test module, posting transactions and simulating scenarios, testing what/if limits of the system. So I can award myself a seven digit salary increase, borrow ten times that amount, draw cheques, and even transfer funds from someone else's account to repay my loan, all at the click of a button - a real Cool world.

This week our members of parliament gave us another bile inducing moment with yet another attempt to raise their salaries. These are people who live in an economic matrix where they believe that ordinary laws do not apply to them. They raise their own salaries (which other job can claim that?), pay a pittance in taxes, and are able to propose and play with myriad bills – that all concern other peoples money. From day one, when they blackmailed arm-twisted the then Finance Minister (2003) to increase their salaries they have been on a tear as the rest of the country watches. Now there's a proposal to increased their number either through more constituencies or women seats. I'd like to see more women parliamentarians, but I believe i can already name most of the women MP's who will sit in parliament next year – just add up all the defeated candidates and past women MP's, and activists and you get an idea of the next group to get paid by the exchequer. As much as this parliament has accomplished - sexual offenses bill, CDF, education, health, anti-corruption etc. - this parliament will be remembered for salary increases and lack of quorum.

As a citizen, I applaud the economic gains made, but as a taxpayer I lament the waste that the increased tax collection has not been prudently applied. We don't need more ministers or MP's who live an economic matrix of their own.

Anyway, on to other news


Barclays
- has opened 32 branches since it's change of direction last year
- You can pay for Kenya Re and other shares with Barclays Visa card at Sterling, Suntra, CFC, Ashbu and Discount stockbrokers.
- Barclays stretching personal loan repayments from 1 year to 5 years. This way, they will earn more money interest income while postponing some potentially bad debts (in duplum era) after co-op bank did the same earlier this year.

- CFC has an arrangement with postal corporation of Kenya to enable people to buy shares at post offices throughout Kenya. This is the third major attempt to extend a stockbroker's reach after Suntra/Postbank and K-Rep/Ngenye Kariuki partnerships.

Equity bank to take up 20% of housing finance. Spruce up on the banking act, as this is not a popular activity with the Central bank i.e. banks owning shares in other banks. Still, it's amazing how many records Equity continues to break. Last year, they attained the billion shilling profit mark; this year, they achieved that in six months

ICDCI stock to watch according to bloggers - Fintrade Capital and Smart Biz Africa

National bank: Having sorted out its non performing debt problem, will it become a target for Stanbic again, after CFC merger is done? Also Equity is a long shot

NIC: In the week it was dropped from the 20 share index (in favor of ICDCI), it was also the best performing stock after announcing a rights issue and bonus share proposal . This former Barclays subsidiary has been the leading provider of asset finance to individuals and corporations in Kenya.

Other

Kenya Airways receives the first Embraer 170 LR(two more to follow) plane which will serve Zanzibar, Mombasa and Dar es Salaam routes.

Nation media group has had another record profit half year and an interim dividend of 3/= to be paid. They launched the business daily a few months ago, but could they be about to launch yet another newspaper in September?

It may be called the Daily Star, and will come a few months after Kiss FM's Nairobi Star. Both Business daily and the Nairobi Star (where's the John Githongo column and news website?)have faded somewhat from public presence of mind since their high profile launches. B-Daily is a great read online, and should remain so.

The Minister of Finance talks about having virtual meeting to cut costs – perhaps like Vodafone which has an AGM page with webcast and voting items online

Award opportunity
opportunity for 5 dynamic African companies from either Burundi Rwanda Tanzania Uganda or Kenya to earn up to $50,000.

Share splits continue

ICDCI formalized their share split yesterday as CMC also announced a 10 for 1 share split.

Pressure will continue to build on companies with high flying shares like BAT, Bamburi and Standard Chartered to follow Barclays, Sasini, and EA Cables in announcing share splits. Speculation about splits has also caught on at KPLC, Equity, NMG and Jubilee.

Oil
- NOCK will acquire 45 service stations from Somken an independent Kenyan company which seems to be shifting its focus to oil exploration.

Jobs

AIG Kenya
- Consumer marketing manager
- Agency development manager
HR-kenya@aig.com by 26/1

Internal auditor at Care Kenya. apply to hrmanager@care.or.ke by 20/1

Project management office Director at the East African Tea Trade Association (EATTA) - Mombasa. Details here and deadline to info@eatta.co.ke is 22/1

Family finance: - Head of business development, branch business development managers (5), Credit officers (27), procurement officer. Apply online by 27/1

Executive director at Forum for Africa women educations Apply through KPMG by 31/1

Kenya commercial development foundation: Finance & investment manager, financial management accountant, grants management accountant, communications officer and interns. details here and deadline is by 26/1

Tsavo securities: Head of stock broking head of fixed income head of ICT and head of research as well as relationship managers apply through manpower associates

Following the recent government director on using chase cars to escort money to/from banks G4S/Securicor will hire over 800 new drivers

distributorships
For Celtel in Nairobi, Coast, Mt. Kenya, Western, Nyanza, Central & North rifts. Contact Kioi.e@ke.celtel.com

For Honda motorcycles in Kenya. Contact Takao_Ishizuka@hm.honda.co.jp

EADB Venture Capital

The East African Development Bank is proposing to set up a venture capital fund to invest between $100,000 to $1 million in companies who have turnover over $100,000 and are prepared to give the fund shares in exchange for capital invested. Expressions of interest to be sent to venturecapital@eadb.org

State of the VC

Is Kenya ready for VCs? Do we have the expertise and are they necessary?
The regulations for the VC industry are yet to be formalized and the Acacia Fund remains the only venture capital firm licensed by the CMA. But there are other players such as ICDCI, investment advisers, investment companies, and entities like Transcentury who can arrange equity-based financing for viable companies.

Given the archaic company laws and endless court processes, entrepreneurs in Kenya have to be very careful about who they let in as equity partners. They feel better off borrowing from a bank that they can pay off and walk away from after a while instead of having VC as partner/co-owner.

The VC route is more suitable for established companies who have a good long-term understanding of their requirements and the benefits that are offered by different equity partners.

A more viable, non-VC option for start-ups is the government’s proposed youth enterprise fund which was gazetted in December. (read more)

November Investments

The middle of November brings a choice of three new investment options to look at:

Eveready OFS
At 9.50 shillings per share this is the cheapest to buy. Others have gone through the prospectus. prospectus

This is a company that will largely depend on rural areas to remain in the dark i.e. anti KPLC. But the company needs top get into new products such as batteries for solar gadgets and laptop’s batteries- things that will provide future customers. But when asked about R&D on Capital FM this week, the MD mentioned that this is something they rely on Eveready US to do. So the views of an African country will not rank up there. Also watch to see if ICDCI retains it stake or takes advantage of the euphoria of retail investors buying in at the front to walk out of the back door (like Uchumi).

The shares are likely to be over-subscribed and I still maintain that the hassle of time spent visiting stockbrokers coupled with the inevitable refund of most of your money in a month’s time is not an enticing option. So I’ll wait till December, or opt for the bare minimum (500 1,000 shares at 9,500 shillings). Going by other offers this year (Kengen, Scangroup), the shares may double or triple in price in the first week and then stabilize after a month.

Diamond Trust rights issue
Priced at 50/=, good outlook for a bank looking to expand regionally and possibly absorb another bank next year. I have had the shares for over a year bought at 27/= now trading at about 76=. With the rights being sold at 50, that means one can get an immediate 50% return by flipping them immediately. I’ll probably buy my rights, and more, and hold.

Family Finance Building Society (FFBS)
This fast rising building society that intends to become a bank next year. Shares are priced at 60/= and are open to account holders, but anyone can open an account and buy the shares.

Like Equity: In preparing to become a bank, they have dutifully being publishing their quarterly accounts. Equity grew by 20% while FFBS grew its assets by 18% by June 2006 and both achieved their entire 2005 profits in the first half year of 06. FFBS is about 3.5X smaller than Equity, less efficient (operating costs are about 25% higher), and mobilises deposits similarly, but their fast growing loan book, like Equity’s, also comes with growing NPA’s.

Equity raised capital to become a bank in a private placement at 136/=. Thereafter the shares went to the OTC where I had a chance to buy, but passed on, the shares at 75/=. They were listed in 2006 at 90/= shillings and have settled in the 100 – 130 range.

Difficult to judge, but I’d rate it as a buy even though they have been very slow to provide information for new investors e.g. on who others shareholders are, when we’ll know about allocations, refunds, listing etc.

Equity or Uchumi?

Uchumi
Bad timing for Uchumi whose private placement to raise 300 million shillings from shareholders draws to a close on August 15, which is when we are making investment decisions about Equity Bank shares.

The minimum investment of 10,000 shillings, approximately equals my loss, and I have to say no thanks this time - I am not going to put another 10,000 into Uchumi. It's too soon to come back begging, the company's status is unclear, and there are too many investment options out there.

Shareholders who take part will be on par with the government's rescue loan, but rank behind after banks and suppliers. And we know how poor parastatals are at repaying government loans. Also, there are many investigations pending, and no one has yet come out and clearly reported why the 1.2 bilion shillings raised 9 months ago was not enough or where it was spent.

Yes, I will shop at Uchumi as much as I can, but that's the extent of my support this time.

Equity
With the August 7 listing of Equity Bank shares just a week away, one of the company’s prominent directors has resigned from the Board.

We have to take note of what directors do in a company and it remains to be seen why a director at Equity made this decision so late in the game. We all remember how ICDCI duped the public they were not taking part in the Uchumi rights issue, as a way to reduce their stake in the company when all along they planned, and did sell out of the company completely soon after.

Got Milk
It's a good time for milk drinkers as prices have dropped and all the major dairies have positioned sales people at supermarkets to hawk their milk. Many of them are selling 500ml packs at 20/= (down from 25/= a few months ago) and also give away a free 200ml pack as well. The oversupply of milk is likely to reduce prices paid to farmers - a situation that no one wants, and so milk companies are giving away their surplus for free.

Bio-diesel
Nice feature on KTN/Standard over the weekend about efforts to produce bio-diesel in Kenya. Kenyatta University is pioneering a scheme in which 200 farmers in Kitui, Bondo and Rachuonyo are cultivating jatropha curcas which take 2 months to grow and can be used to produce diesel, which should reduce the country’s fuel bill.

a dollar a day

Have been running Google advertisements for a few months, and "earning" just under a dollar a day which is an international poverty line measure for individual income.

Over the weekend I received my first cheque from Google for $100 dollars (about 7,100 shillings). Not bad but it’s a start, because sometimes blogging is time consuming and it’s good to get some cash from some non-intrusive advertising.

Unfortunately Kenya is not one of the few countries that Google has selected to make payments in local currency. Am off now to look for a bank that will enable me to cash the cheque drawn in New York with a minimum of bank charges and fees.


Sad News
- Military Plane crash has kiled 4 MP's including assistant minister Mirugi Kariuki and former Foreign Affairs minister Bonaya Godana as well as at least 14 other people.

- Head of the Kenya Bureau of Standards (KBS) , Eng. Masila also passed away in a road accident over the weekend. He had steered his organization to enforce some stringent quality measures leading to higher quality of imports into the country.

NSE rumbles
Two stories in the East African today:
(i) The Transcentury Group, which recently acquired 4% of KPLC, is at an advanced stage to take over 25% of Housing Finance Company of Kenya. Two years ago they took over East African Cables and shareholders of that company saw their shares shoot from 10/- to over 160/- today.

(ii) Sameer Africa has sold its 10% in Uchumi, just three months after buying them from ICDCI and also resigned their position on the board. The Uchumi Board has since appointed Albert Ruruti, former KCB operations manager to the board and also as Chairman of the company.

March 1

Banking
After Barclays last week, three other Banks have jsut published their results and with 30 days to go in the month, daily newspapers will have at least one bank printing their 2005 results each day by the march 31 deadline.

Those who have done well will publish their results in two or more newspapers (at a cost of 300,000 per color page) while the few who have performed poorly can get away with publishing the results in the lower circulation Kenya Times or People newspapers.

Kenya Commercial Bank (Ranked No.3 in assets)
Barclays posted a 5% return on assets (ROA) and 47% on return on equity (ROE), while KCB had a 1.9 billion pre-tax profit, 3% ROA and 20% ROE in 2005. The Bank will pay a 1st and final dividend on 4 shillings per share to shareholders after their AGM to be held at KICC on June 16.

Even though customer deposits grew from 52b to 60billion shillings during the year, their loan portfolio remained at 33 billion. The Bank also had to restate their 2004 results as their other income was 477 million and not 785 million shillings.

National Industrial Credit Bank (NIC) (No. 8 in assets)
The Ndegwa controlled NIC Bank posted a 403 million profit before tax, 2% ROA and 16% ROE. The bank's assets stood at 20.6 billion with customer deposits of 16.6 billion and 14.1 billion in loans at the end of the year. Shareholders will be paid a final dividend of 1.8 shillings per share after their AGM on May 17.

Equatorial Bank (No. 29 in assets)
The Merali-controlled Equatorial Bank (109 million profit before tax, 3% ROA and 19% ROE) ended the year with 3.7b assets, 3b in deposits and 1.8b of loans.

Credit Bank (No 32 in assets)
The Nyachae controlled Credit Bank (90 million profit before tax, 3% ROA and 19% ROE) ended the year with 2.8b in assets, 2b of customer deposits and 1.7b worth of loans.

Bank Jobs
Kenya’s next bank is expected to be Family Finance which plans to convert from a building society into a Bank by June 2006. With assets of 3.2 billion in June 2005, they will rank as about Bank No. 30 in the country and hired Mr. S T Wainaina as their new general manager this week.
As such they are hiring;
- Branch managers
- Assistant branch manager
- Branch accountants / supervisors
- Credit officers
Apply by 16 March to the HR manager at info@familyfinance.co.ke. Applicants must be aged 26 – 35 with a business degree and 3 years relevant experience.

ATM Wars
Pesa Point has put up 80 ATM’s in 4 months, surpassing Kenswitch's 45 set up over almost 3 years.

Stanbic
Stanbic which plans to acquire some Kenyan banks, has mini-branches at several Uchumi outlets and now offers a finance plan for Uchumi customers to buy household items such as TV's, washing machines, cookers, fridges, and furniture.

Finance
Sameer
Turnover was flat – a slight increase from 3.27b to 3.36 billion shillings in a year in which the company broke away from the Bridgestone-Firestone company. The change, which entailed increased advertising revenue of the new brands, caused after tax profit to drop from 275m to 205 million. The company’s AGM will be held on March 31 at 11 and a dividend of 0.5 shillings per share has been declared.

Oddly enough, the register for payment of dividends will close on April 5 - after the AGM, not before/on the day of the AGM as is the trend at most companies here. Sameer has also announced that it will cross list its shares on Uganda stock exchange.

ICDCI
ICDCI's six month results showed that investment income increased from 133m to 278m shillings, largely as a result of their off-loading shares in Uchumi. The company also bought 4% of K-Rep Bank in a continuing diversification program.

Coffee industry
The Coffee Board of Kenya launched a new website on February 24. It has up to date results of weekly coffee auctions but some links not working though. Hopefully this will shine a light on an industry that is booming around the world, but collapsing in Kenya (to a point where farmers are uprooting their trees) where it is tightly controlled by an endless cartels of middlemen who shun new ideas (Tetu) and who suffocate and frustrate farmers and new investors.

Future of Giant Parastatals
The Daily Nation looks at the future prospects of Telkom Kenya and the
Kenya Power & Lighting Company

Jobs
The Standard is hiring business executives. Applicants must have business degrees, 1- 3 years work experience, and be aged under than 30. Apply to hrd@eastandard.net by March 8.

opportunities
- Transport/distribute sodas for Softa bottlers and collect empties nationwide. Email info@kuguru.com
- Manage catering facilities at the UN including quality value menu. E-mail by March 3 to cps.registration@unon.org
- Owing to great international demand, Farmers’ Choice is urgently seeking pigs and paying cash for each delivered for slaughter.

Bank Barons

Jaindi Kisero points out that commercial banks borrow money from you at 2% and lend it to the government at 8%.

Year end
ICDCI closed the year with a profit after tax of 295 million, up from 241m in 2004. While investment income dropped sharply from 355m to 240m, expenses remained flat at 80m. The increased profit comes from the 1st time inclusion of UAP Insurance results (ICDCI owns 24% of UAP which returned a profit of 334m) and this lifted up income from share of associated companies from 72m to 245m. In addition to a reduced stake in Uchumi, ICDCI also owns 1% of KCB and EA Breweries, among other investments. The company will pay a dividend of 3 shillings per share (same as in ’04) on December 7 to shareholders of record as at November 10th.

New Uni
The Great Lakes University of Kisumu, a new institution, is being built in Kisumu by the Tropical Institute of Community Health & Development (TICH) in Africa.

Flight plan
The Standard on Saturday reported that Air Kenya had cleared a 333 million shilling debt with Barclays bank to avoid being placed under receivership. In May, Barclays had appointed a Statutoty Manager when the airline defaulted on its debt.

Ugly face of food aid
American generosity must be good, not just for the world's hungry, but also for American agriculture.

Pot Pourri

SMS Me



You can now send an SMS to the Public Communications Secretary (a.k.a. the Government Spokesman) at number 2888 from either Safaricom or Celtel at a cost of 10/- per message.

Uchumi
The Rights Issue is critical to the survival to the supermarket chain. The prospectus contains a message from the company’s auditors, PriceWaterhouseCoopers, indicating that the rights issue may only raise 850 million shillings, and not the 1.2 billion targeted. The company will also sell its Ngong Hyper (to raise 270 million) Langata (250 m), Langata South (27m) and other properties to also raise funds. Although principal shareholders ICDC and ICDCI announced they would not take up their rights, they have effectively done so, by putting up a 105 million shilling loan to the company in July 2004. Also reported in the Standard today.

Golden handshake reprieve
According to the East African, the Federation of Kenya Employers has asked Finance Minister David Mwiraria to rescind his decision that prevents employees from collecting their pensions before they reach age 55, noting that life expectancy in Kenya is now around 45 years.

Free scratch paper from your bank
According to a UK survey, 60 per cent of people do not regularly read their mortgage, pension or bank statements.

Weather forecast
Yesterday evening, Nairobi had one of its freak rain storms that usually coincide with rush hour. So today I am comparing various forecast tools for their effective forecasting of the rest of the week’s weather.

Yahoo Tuesday: Some sunshine with a thunderstorm or two this afternoon. High 79F. Chance of rain 30%. Night Considerable cloudiness with occasional rain showers. Low 56F. Chance of rain 50%.
Tomorrow: A few showers early with mostly cloudy conditions later in the day. High 78F. Chance of rain 30%. Night: Cloudy. Low 56F. .
Thursday: Partly cloudy with a stray thunderstorm. Highs in the upper 70s and lows in the low 50s.
Friday: Showers. Highs in the mid 70s and lows in the low 50s.

CNN Tuesday partly cloudy 79°F (26°C) | 50°F (10°C)
Wednesday partly cloudy 78°F (26°C) | 52°F (11°C)
Thursday partly cloudy 80°F (27°C) | 50°F (10°C)
Friday partly cloudy 76°F (24°C) | 47°F (8°C)

BBC Tuesday light showers 24°C 14°C 6 good 1014 72
Wednesday sunny 20°C 13°C 5 good 1016 93
Thursday sunny 22°C 12°C 4 very good 1015 67
Friday 22°C 14°C 6 good 1015 69

Accuweather Tuesday Pleasant with a blend of sunshine and clouds High: 26° C Night: Mainly cloudy Low: 10° C
Wednesday Nice with times of sun and clouds High: 25° C Night: Partly cloudy Low: 11° C
Thursday Pleasant with clouds and sunshine High: 26° C Night: Partly cloudy Low:10° C
Friday Nice with times of clouds and sun High: 24° C Night: A shower possible in the evening; otherwise, partly cloudy. Winds will be calm Low: 8° C

Iraq constitution
Some cool things about the new Iraq constitution

1. It's only 26 pages long
2. Article (6): Government should be rotated peacefully through democratic means stipulated in this constitution.
3. Article (26): The country shall guarantee the encouragement of investments in the different sectors.
4. Article (28): Low-income people should be exempted from taxes in a way that guarantees maintaining the minimum level necessary for a living. This shall be regulated by law.
5. Article (30): The state guarantees social and health insurance, the basics for a free and honorable life for the individual and the family -- especially children and women -- and works to protect them from illiteracy, fear and poverty and provides them with housing and the means to rehabilitate and take care of them. This shall be regulated by law.
6. Article (52): Sessions of the Council of Representatives (Parliament) shall be public unless it is necessary to do otherwise.
7. Article (58): Quorum for sessions of the Council of Representatives shall be reached by the attendance of the absolute majority of its members.
8. Article (59): The Council of Representatives may withdraw confidence from a minister by absolute majority, and he/she is considered (resigned) from the date of the withdrawal of confidence.
9. Article (59): The Council of Representatives decides the withdrawal of confidence from the prime minister by absolute majority of its members.
10. Article (59): (c) The Cabinet shall be (considered resigned) in the case that confidence is withdrawn from the prime minister.
11 Article (75): A minister must have a university degree or an equivalent.

Job Watch

All jobs appear in the Nation of Friday February 4, 2004 – please see it for comprehensive requirements, details and contacts for these jobs.

ICDC Investments
(1) Finance Manager/Company Secretary (REF FM/CS-001)
Requirements are business degree and 3 years experience in financial management/audit/accounting and 2 years exp in company secretary work, also CPA (K) and CPS (K)
(2) Investment Manager (REF: IM-001)
Business university degree, 2 years financial analysis experience, investment banking, corporate finance, consulting, MOA would be an advantage. Also qualification like CFA, CPA, ACCA or CIMA
Apply by Feb 25 to Managing Director, ICDC Investments Co. Ltd., P. O. Box 10518-00100 Nairobi or jobs@icdci.co.ke

Internal Auditor: Jubille Insurance Company
Bachelors degree, CPA/ACCA or equivalent and five years audit management experience
Apply by Feb. 22 to The Group Human Resource Manager, The Jubille Insurance Co. Ltd, P. O. Box 30376-00100 Nairobi or personnel@jubileekenya.com

Finance and IT Director: Cadbury Kenya (REF: F/ID/05)
Must have b.com degree with ACCA or CPA - an MBA would be an advantage. Also must have six years experience in strategy/analysis
Apply by 18 Feb. 2005 to Executive Selection Division, KPMG Kenya, P. O. Box 40612-00100 Nairobi or esd@kpmg.co.ke

Propert Manager: For a leading agriculture based corporation in Nairobi
Must have land economics degree, and a clear understanding of property management, and be a Kenyan aged 30-45
Apply by Feb. 18 to DNA 77. P. O. Box 49010-00100 Nairobi

Power Engineer/Operations Officer: The World Bank Africa Energy Unit, based in Nairobi Kenya (one year consultant contract)
Must haves 5 years experience and MSc in electrical engineering (or equivalent) or BSc in electrical and postgraduate degree in business or economics. Also knowledge of power sector and ability to collaborate with government and NGOs.
Quoting “Application for Power Engineer/Operations Officer,” apply by Feb. 25 to Country Director, World Bank – Kenya, P. O. Box 30577-00100 Nairobi or infoke@worldbank.org