Why Kirubi is Sh67 million richer

Life is good for billionaire businessman Chris Kirubi. His sale of the BIC East African franchise to its European brand owner has continued to net him and Haco Industries millions of shillings.

He has received an additional Sh67 million as part of his staggered payment following his sale of the regional stationery, lighters and shavers franchise to French conglomerate Société BIC which owns the brand.

Mr Kirubi, through his manufacturing unit Haco Industries Kenya Limited, was paid an initial €6.3 million (Sh703 million) in the deal which was completed in 2018.

Société BIC later announced that Haco is entitled to an additional deferred payment amounting to €9.9 million (Sh1.1 billion) over three years, raising the total compensation to Sh1.8 billion.

The multinational, which made the first additional payment of €1.8 million (Sh201 million) in the half year ended June, has disclosed that it paid Haco a further Sh67 million in the three months ended September.

This brings its cumulative disbursements to Haco in the first nine months of the year to €2.4 million (Sh268 million).

Once all the payments are in, Mr Kirubi’s profit in the deal will stand at about Sh611 million, representing the premium on the value of assets transferred to the French multinational.

The businessman earlier told Business Daily that the deferred payment is due to the capital commitments Haco had already made in the BIC business by the time the transaction was completed on December 31, 2018.

Société BIC took over manufacturing facilities in Kenya and distribution of stationery, lighters, and shavers in East Africa, with Haco retaining ownership of the properties which it has leased to the French firm.

The French multinational says it inherited BIC inventory with a gross value of €2.8 million (Sh312 million) and supplier debt of €9.9 million (Sh1.1 billion), resulting in short term liabilities exceeding current assets by €7.1 million (Sh793 million).

Despite this, Mr Kirubi priced the deal to emerge with the Sh611 million profit which is booked as goodwill by the French company.

Sale of the BIC division means that Haco is now left to trade in the home care and hair care line of businesses whose brands include Sosoft fabric softener and Miadi shampoo.

Société BIC acquired Haco’s semi-automated production plant located in Kasarani as part of the transaction which the Kenyan firm said would give it an opportunity to diversify and grow in the regional markets.