East African Cables Plc Sells off Tanzanian Subsidiary to Msufini

By Monica MUEMA

East African Cables Plc (EAC Plc) Wednesday reached an agreement to sell its majority stake of 16.2 million shares in Tanzanian subsidiary East African Cables (Tanzania) Limited (EAC Tanzania) to Msufini (T) Limited.

The completion of the transaction is subject to, inter alia, the approval of the Capital Markets Authority of Kenya, and the validation of other relevant financial and regulatory authorities, as well as approval by shareholders.

The strategic transaction will substantially cut down East African Cables Plc’s debt by extinguishing EAC Tanzania’s debt, thus aligning with EAC Plc’s five-year growth strategy, which seeks organic revenue growth and sustainable debt.

EAC Plc CEO, Paul Muigai said: “This strategic move is a key plank in delivering EAC strategic turnaround plan by unlocking value to strengthen our cash flow and restructuring our balance sheet for sustained growth.

The Group now moves to focus on Kenya as a manufacturing hub as it continues to sustain a positive growth trajectory, driven by increasing demand from retail and wholesale categories for building and construction projects in the region.

The Kenyan company recorded a 24.4% growth in Gross Profit in half year 2023 attributed to increased sales volumes in the retail sector, sustained market development and concerted marketing efforts as well as increased operating efficiency.

The Earnings Before Income Tax Depreciation and Amortization (EBITDA) over the same period, also significantly improved (114%), while the net earnings grew 15% compared to the same period in the previous year. EAC continues with its export business with distribution partnerships across the region.

Msufini Director Judith Lambert said: “EAC Tanzania is well suited for our portfolio and fits into our growth plans.

Msufini is a private limited liability company incorporated in mainland Tanzania, whose primary business is the manufacture and sale of chlorine and sodium hydroxide.