Eveready to sell land amid shareholders' protest

The financially struggling Eveready East Africa Company has resolved to sell an 18.5-acre prime piece of land in Nakuru Town amid protests from some shareholders.

The firm will also change its name to Eveready East Africa Public Company Ltd, in line with the 2015 Companies Act.

Some shareholders walked out in protest moments after the land-sale resolution was passed Merica Hotel.

The land in Nakuru’s industrial area comprises 46 per cent of the company’s assets, according to a 2015 audited report.

Managing Director Jackson Mutua and board chairman Lucy Waithaka downplayed the divisions among shareholders.

“The shareholders did not walk out in protest but were rushing to have their lunch as they wanted to avoid the long queue at the serving area,” said Mr Mutua after the meeting.

The protesting shareholders faulted the board for not doing enough to forestall financial losses at the company.

They also claimed that board members were being paid though shareholders had not received their dividends for close to 10 years.

Defending the decision to sell the land, Mr Mutua said it was lying idle while the company was facing serious financial problems.

“The company's levels of borrowing, at Sh509 million, [are] unsustainable and the persistent high interest rate regime continues to hurt the business and erase shareholders’ value,” he said.

He said the land and equipment are valued at Sh 837 million and Sh456 million, respectively. He said the total Sh1.29 billion would be enough to clear the company's debts and pave the way for shareholders to eventually start earning dividends, which they last earned in 2008.

Mr Mutua said the money from the sale will also be used to buy a new piece of land on Mombasa Road and build a warehouse and new headquarters, adding that this will save the company money it now spends on leasing offices.

Shareholders who oppose the plan say selling the land is equivalent to killing the company.

“If we sell the Nakuru land, that is tantamount to saying goodbye to Eveready and as such I don’t support the move because the board is not serving the interests of shareholders,” said Festus Lumumba.

Another shareholder, Daniel Kimotho from Nairobi, said the Nakuru land is the backbone of the company and once it is sold Eveready would be no more.

“If you sell 46 per cent of the company, there would be nothing to talk about and I bet three years later there would be no other asset to dispose [of],” said Mr Kimotho.