Expiry of Energizer deal signals new woes for Eveready
What you need to know:
- US-based Energizer Holdings, which sells the goods to the Kenyan firm, owns 22.06 million shares or a 10.51 per cent stake in Eveready East Africa.
Eveready East Africa’s partnership with parent firm Energizer International Inc has expired, signalling a new challenge for the loss-making company.
Eveready said Monday that its five-year contract with Energizer ended last month.
The troubled battery firm had signed a deal to distribute Energizer products such as flashlights, batteries, Schick razors among other accessories.
The NSE-listed company said the agreement “expired by effluxion of time on September 30, 2016” and that there are ongoing talks with Energizer to forestall cases of stock outs for these products.
“Eveready has in the meantime put in place measures to ensure that the company continues to supply products to its consumers in the market pending the conclusion of these discussions,” the company said in a regulatory filing on Monday.
US-based Energizer Holdings, which sells the goods to the Kenyan firm, owns 22.06 million shares or a 10.51 per cent stake in Eveready East Africa.
Eveready in October 2014 announced that low sales due to illegal imports of cheap batteries and high energy costs had forced it to shut its Nakuru factory in favour of importing batteries from Energizer.
The expiry of the Energizer distribution deal comes after a prolonged stock out hit Eveready East Africa earlier this year.
Supply of Energizer batteries to the Kenyan market was affected by the breakup of Energizer Holdings into battery and personal care businesses in 2015.
Energizer split into new Energizer and Edgewell Personal Care which led to disruption in supplies, the company said.
Sterling Capital Limited said the effect was highlighted in the first half of the year as revenues were lower by almost 50 per cent at Sh300 million.
The battery firm reported a Sh58.9 million net loss in the six months to March 2016, compared to the Sh12.4 million loss posted during a similar period last year.
