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VENTURES AFRICA – Kenya Wine Agencies Limited (KWAL) has finally approved the sale of 26 percent of its shares to Distell, South Africa’s largest wine and spirit maker.
The sale, which should have been concluded June 30 last year was finally concluded in December and negotiations are underway as to how much Distell, will pay per share.
““We are now in the final stages, we concluded the negotiations in December and the transaction is close to completion,” Solomon Kitungu, the commission’s chief executive told The Standard last week.
According to the terms of agreement, KWAL will have sole distributorship of Distell products in East Africa while still exercising control over the development and production of its own products.
The deal is a move in the privatisation process of KWAL which will be fully accomplished within a period of four years after the Kenyan Government totally relinquishes control of the remaining 72.65 percent shares it owns through the Industrial and Commercial Development Corporation (ICDC)
This plan has taken effect with the sale of 26 percent to Distell and 4 percent to KWAL employees leaving 42.65 percent shares that have to be disbursed in the four years’ time frame but according to the Privatisation Commission (PC) which is charged with sales of the shares, the process of selling the remaining shares has not yet been determined.
Although Distell and KWAL have been in partnership since 1998, there have been disputes between both companies.
Their continued partnership however shows the partnership is profitable even though investors and analysts think that Distell will demand for a seat on the board of KWAL.