Haco to pay own debts after Bic franchise takeover

French firm Société BIC will not take over debts owed by Chris Kirubi’s Haco industries after conclusion of the under way transfer of the manufacturing and distribution franchise back to the multinational.
Haco, which has been manufacturing and distributing the BIC brand for about three decades, earlier last year signed an agreement to relinquish the business to the French multinational for an undisclosed amount.

The transaction, which was to be completed by January 1, is set to bring to an end Haco’s franchise that saw it manufacture and sell BIC branded stationery, lighters and shavers.

“All money, debts or liabilities due and owing by the transferor in respect of the business up to the date of transfer as set out shall be received and paid by the transferor.

“The transferee is not assuming nor is it intended to assume any liabilities incurred by the transferor in the business up to the date of transfer,” said Mukite Musangi and Company Advocates in a notice published in the latest Kenya Gazette.

Haco, owned by businessman Chris Kirubi, recently signed an agreement to transfer its entire BIC manufacturing and distribution business to the multinational for an undisclosed sum.

In the deal, BIC will acquire Haco’s semi-automated production plant located in Kasarani as part of the transaction which the Kenyan firm says gives it an opportunity to diversify and grow in the regional markets.

The deal adds to the emerging trend in retail and fast-moving consumer goods sector, where multinationals have squeezed out local franchises by buying them out or forcing them into joint ventures.

Such moves have been seen to arise from the desire to take a bigger chunk of profits as well as enforce standards, including pricing, marketing and customer service.

BIC says the transaction is in line with its continued growth strategy in Africa, with the multinational attracted by a positive outlook for the stationery market.

The move comes barely a year after Mr Kirubi completed the takeover of Haco Tiger Brands East Africa, becoming the sole shareholder of the company.

Mr Kirubi in 2008 sold a 51 per cent stake in the firm — then trading as Haco Industries — to South Africa’s Tiger Brands for more than Sh300 million.

However, a disagreement over the company’s strategic direction saw Mr Kirubi buy out the multinational.

Source: Business Daily