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Eveready East Africa board of directors has been given the greenlight to sell the company’s land in Nakuru.
During an extraordinary meeting a fortnight ago, the firm’s shareholders approved a special resolution to sell the 18.5-acre piece of land on which its closed factory sits including all equipment and other assets on it.
Eveready managing director Jackson Mutua said funds raised from the sale of the properties, valued at Sh1.29 billion, would be used to offset Eveready debts, build the company’s headquarters, provided working capital for its distribution business and pay shareholders dividends.
The piece of land has been valued at Sh837 million, or about Sh40 million per acre.
Published accounts of 2015 show that the company had been indebted to the tune of Sh509 million, and spent Sh104.1 million on finance costs on its borrowing levels.
The loan includes a foreign denominated currency component that contributed significantly to the loss recorded in the year even though the company was profitable at operations. He said about Sh310 million would be used to offset the loan as the balance of the credit is held in stocks.
Mutua said the company further plans to acquire more than one acre of land on Mombasa Road to build its head offices and distribution centre.
“This will complement our retail model and eliminate our property leasing costs,” he told shareholders.
The Nakuru Property, which accounts for 46 per cent of the company’s assets, has been largely idle since the company closed its manufacturing facility in 2014.
He said new cash would increase the company’s liquidity needed to turn it around by diversifying into new products for its distribution business.