Kenya Wine Agencies sale suspended
An operator at a Kenya Wine Agencies packaging plant. Distell has acquired a 26 per cent stake in Kenya Wines Agency as it aims to grow its markets share of alcohol on the African continent. PHOTO | FILE
What you need to know:
- The government owns 72.65 per cent shareholding in Kwal through the Industrial and Commercial Development Corporation
- The reforms committee has proposed that the firm be put under a yet-to-be formed government investment corporation
The sale of Kenya Wine Agencies to a South African firm has been put on hold pending the completion of the ongoing parastatal reforms.
A letter to the Privatisation Commission CEO Solomon Kitungu from the State Corporations Advisory Committee - which is overseeing the reforms, orders immediate cancellation of the talks on sale of the company.
“This is, therefore, to bring to your attention the need to put on hold the intended transfer of ICDC shares in Kenya Wine Agencies Limited (Kwal) Holdings EA Ltd to South Africa’s Distell Group Ltd,” reads the letter signed by Ms Jane Mugambi, the secretary of Parastatal Reforms Implementation Committee.
TOTAL EXIT FROM FIRM
The government owns 72.65 per cent shareholding in Kwal through the Industrial and Commercial Development Corporation (ICDC).
ICDC is seeking total exit from Kwal over the next three years, with an initial sale of 26 per cent stake to Distell and a further four per cent to employees. The remaining 42.65 per cent is to be offloaded over the next four years.
Kwal and Distell have had a 15-year partnership for distribution of the latter’s products in Kenya, which include Amarula and Viceroy. The sale will require Distell to give Kwal exclusive rights to distribute its products in East Africa.
The letter also restates government position that no privatisation should take place until the reform process is over.
“All privatisation undertakings remain suspended pending finalisation of the ongoing parastatal reforms,” the letter further states.
Mr Kitungu declined to divulge any information, saying the matter was privileged.
“Some of the issues on which you have requested information are currently under discussion within government. We may, therefore, not be able to give you definite responses prior to completion of the on-going discussions,” he said.
The reforms committee has proposed that the firm be put under a yet-to-be formed government investment corporation.
It has also emerged that the privatisation commission’s work had been severely hampered by lack of quorum with the expiry of terms of office of former commissioners while others left.
Former chairman Peter Kimuyu for instance, has not been replaced since he quit the team under unclear circumstances.
