Transport company Coast Hauliers is set to transfer its assets including motor vehicles to Seven Stars Limited in a multi-million-shilling divestiture.
The company has operated for more than four decades, transporting cargo from the port of Mombasa to interior of Kenya and the eastern African region including Rwanda.
Seven Stars will acquire motor vehicles, workshop tools, transport equipment, accessories and stock in a transaction that will see Coast Hauliers retain its debts, business contracts and tax among other obligations.
Seven Stars will also inherit Coast Haulier’s premises in Mombasa as part of the agreement.
“Sale assets belonging to Coast Hauliers … shall be sold to Seven Stars who shall carry on its business from the premises under its name,” reads part of the notice announcing the deal in the latest Kenya Gazette.
“All money debts or liabilities due and owing by the transferrer in respect of the business up to the date of transfer as set out above shall be received and paid by the transferrer. The transferee is not assuming nor is it intended to assume any liabilities incurred by the transferrer in the business up to the date of transfer of the sale assets.”
Law firm Anjarwalla and Khanna acted for Coast Hauliers while Seven Stars was represented by Coulson Harney Advocates in the transaction. The deal indicates that Coast Hauliers is scaling down its operations.
It deals in transport of general cargo, containers and “out of gauge” items such as boats and electrical transformers.
Commissioning of the Standard Gauge Railway (SGR) is expected to significantly cut the business of truckers who will be at a disadvantage in terms of pricing and speed of delivery.
About 95 per cent of exports and imports are currently transported by road, a situation that is expected to change markedly once the new railway starts operations later in June.
Kenya Railways says one train will haul 216 twenty-foot containers in a journey that is the equivalent of 108 trucks on the road.
This translates to a total of 4,644 trucks taken off the road if all the 43 freight trains are running.
The cargo trains procured allow for double-stacking of containers and will move at 80 kilometres per hour. The trains will be diesel- powered but can be upgraded to electric in future.