De La Rue offices in Ruaraka, Nairobi. The firm wants to sell its De La Rue EPZ Ltd subsidiary to the Government. [File, Standard]
The Government has set aside an additional Sh892 million to acquire assets, including a ‘majority stake’ in De La Rue and to inject capital into strategic State-owned entities.
In Finance Cabinet Secretary Henry Rotich’s second mini budget for the current financial year, the allocation on Government investment in assets increased from Sh2.9 billion to Sh3.8 billion.
Initially, it was assumed the Government would only buy a 40 per cent stake in the British currency printer, but the supplementary budget target suggests otherwise.
“Delivery unit, equity acquisition in De La Rue. Key Output; majority stake bought in strategic foreign financial institution,” reads the supplementary budget in part.
Treasury has maintained that the cost of buying a stake in De La Rue remains £5 million (about Sh666.8 million), despite Parliament raising queries over payment of about Sh800 million.
Treasury insisted the initial 2016/17 budget had set aside Sh500 million for the joint venture, being part payment of the £5 million.
It is not clear, however, whether the increment included the balance of the payments to De la Rue since the performance indicators showed that all the budgeted funds were set to be absorbed at 100 per cent.
Treasury had also not set aside additional funds in the 2017 budget for acquisition of the De la Rue stake. The Firm operates two companies in Kenya – De La Rue Currency and Security Print Ltd (trading) and De La Rue Kenya EPZ Limited (dormant) with 100 per cent stake in both, according to the UK firm’s 2016 annual report.
It wants to sell part of the dormant company to the Government as part of a two-year strategy to restructure print manufacturing footprint to reduce capacity and cut cost by reducing the number of print lines and consolidating banknote print productions to four locations – Kenya, Sri Lanka, Debden and Gateshead.
A separate budget line shows the Government has also set aside Sh1 billion to rescue pan-African housing lender Shelter Afrique as part of its commitment towards shoring up the development bank’s capital.