Merali Company To Sell 35% Stake in Eveready

A firm owned by the late billionaire Naushad Merali’s family has agreed to minimise its losses in the Nairobi Securities Exchange-listed company by selling its 35% ownership in Eveready East Africa to the Dubai-based InvestAfrica FZCO.

East Africa Batteries Limited (EABL), the batteries distributor’s largest stakeholder, will sell its 73.4 million shares to InvestAfrica in a private transaction, according to a filing with the Capital Markets Authority.

This means that the terms of the proposed deal such as the price per share or the aggregate consideration will not be disclosed to the public.

Additionally, InvestAfrica will allow Eveready’s shares to continue trading on the NSE after obtaining an exemption from takeover restrictions and will not attempt to oust the other shareholders.

“InvestAfrica does not intend to make a general offer to acquire all the voting shares in the company [Eveready] following the proposed transaction and there is no intention to delist the company from the Nairobi Securities Exchange after completion of the proposed transaction,” Eveready said.

“InvestAfrica intends to provide management and technical support to the company following completion of the proposed transaction.”

The share price of Eveready has plummeted to Sh1, down from highs of Sh18 when the business went public in 2006.

With a current market value of Sh226 million, the stake that InvestAfrica is purchasing is worth Sh79.1 million.

However, in accordance with prior privately negotiated agreements, the sellers—the Merali family—expect to be paid more than the current market price.

On June 23, 1987, East Africa Batteries Limited was established in Kenya with the specific objective of holding shares in Eveready.

According to prior reports, the company, which is a member of the Sameer Group, had Naushad Merali, Akif Butt, Mirabeau Da Gama Rose, and former Eveready CEO Steven Smith on its board of directors.

In preparation for the anticipated entrance of the strategic investor, Eveready has already made changes to its boardroom, replacing old Sameer Group representatives with individuals nominated by InvestAfrica.

With effect from May 10, 2023, Eveready announced the appointments of Faith Mwaura, Wilfred Ole Saroni, and Maurice Nduranu to its board.

They took the place of Lucy Waithaka, Akif Hamid Butt, and Fauzia Shah, who all quit on the same day.

Additionally, Mr. Nduranu was chosen to take over Mrs. Waithaka’s position as corporate chairperson.

The interests of the Sameer Group were represented by Ms. Shah and Mr. Butt.

Eveready reported a greater loss for the six months ending in March of Sh17.7 million. Sales dropped from Sh41.6 million to Sh10.5 million, accounting for the performance.

Sales at Eveready, which now only sells batteries under the Turbo brand, have been falling, leading to losses that have completely depleted shareholder cash.