Company mulls over option of IPOs
Posted Tuesday, July 3 2012 at 01:00
- Owner of car dealer Simba Colt Motors plans to transit from a family business to a public listed one
Simba Corporation is considering two initial public offerings as it transits from a family-owned entity to become a public listed company.
The company that owns car dealer Simba Colt Motors is considering a separate IPO for each of its business lines. It is branching into the hospitality industry and says that plans are at an advanced stage to see the company go public. However, this will be depend on the outcome of the next General Election.
“We are looking at selling between 30 to 40 per cent of our business but we are weighing between selling the whole lot or have two initial public offerings, one for the hospitality business and the other for the motor vehicle lines,” Mr Adil Popat, the CEO of Simba Corporation, told Smart Company.
The 44-year-old business is now in the hands of three family members — Mr Popat, his father, and a cousin. Its motor vehicle line trades under the Simba Colt Motors brand.
The firm last week outsourced the management of its new hospitality business to a European hotel chain — Kempinski — to boost its global brand and speed up its entry into the industry.
Simba Corporation is diversifying into the hospitality industry as it seeks fresh revenue streams away from the car dealership business that has come under pressure from new investors and stiff competition.
“Simba Corporation understands the importance of partnering with a brand like Kempinski in order to ensure that we continue to deliver quality products and services,” said Mr Popat at the handing over ceremony last week.
The company said the 200-room Villa Rosa Hotel in Westlands and its luxury Olare Mara camp in the Olare Orok Conservancy will be the first properties to be run by Kempinski. The two facilities, built at a cost of Sh3 billion, will officially open by end of this year under the Kempinski banner.
It also plans to build a 96-room hotel in Kisumu by September next year. “We will also start our three-star programmes and plan to have two units of 150 rooms each on the island of Mombasa and another in the heart of Westlands,” Mr Popat said.
Kempinski Hotels is a luxury chain specialising in conference, catering, and hotel supplies. It has 62 hotels globally, with an additional 43 under development in Africa, Europe, the Middle East, and Asia.
Simba Corporation will pay Kempinski for its management services. In turn, it hopes to ride on Kempinski’s strong reputation in the global hospitality sector to help it grow market share in the hotel industry.
Kempinski runs some of the world’s most famous hotels including the Emirates Palace in Abu Dhabi and competes with brands such as Four Seasons and Ritz Carlton.
Simba has traditionally only sold Fuso trucks, Mitsubishi commercial trucks, and BMW luxury saloon cars. Its entry into the hospitality sector is set to increase competition as Kenya continues to attract new major hotels.
“The primary reason for Simba’s entry into hospitality was to leverage our experience and Simba’s excellent financial backbone and reputation to diversify into a complementary business,” Mr Popat said.
Simba has also started the distribution of the Mahindra brand and has also been in the car leasing market.