Marshalls East Africa #ticker:MASH is set to delist from the Nairobi Securities Exchange (NSE) as Global Ltd, which owns 13.9 per cent of the auto dealer, seeks to buy out retail shareholders in a deal supported by 83 per cent of the owners.
The loss-making car dealer—which once held an exclusive dealership contract for iconic French brand Peugeot — says the delisting is meant to help it “reposition the business to face these (financial) challenges”.
The firm’s top shareholder Global Ltd says it wants to voluntarily buy out minority investors who do not wish to remain in a delisted firm at an enhanced price of Sh10.75.
The offer, whose transaction adviser is Dyer & Blair, will open on May 10 and close on June 7, but is subject to shareholders’ approval at the company’s annual general meeting slated for May 8.
“The company recognises that it has a diverse shareholder base and that not all will want to be part of a delisted company,” it said in a shareholders’ circular, adding that the proposed delisting date is June 19.
“Global Limited has offered to buy out any minority investor who does not want to remain in an unlisted company. Sh10.75 represents a 25 per cent premium to the six month volume weighted average price of Sh 8.58 as at March 30.”
Some 14 shareholders, who collectively own 83.14 per cent of the company have, however, pledged to remain as Marshalls investors after its delisting from the Nairobi bourse.
Marshalls, a firm associated with businessmen Kamlesh Pattni and jailed Ketan Somaia, currently markets KIA cars.
The company, which lost the Peugeot’s local franchise contract to Urysia in 2007, says the deteriorating business environment is due to the “influx of second-hand cars and increased competition”.
Marshalls also lost Tata, worsening its fortunes.
In the year to March 2016, the firm posted a net loss of Sh17.4 million, an improvement from the previous year’s Sh20.4 million. During the period, revenues dipped by 22.8 per cent to Sh81.24 million.
“The delisting will provide the company with the flexibility and time to restructure its business without prejudicing shareholders.
“The delisting will also reduce expenses related to maintaining a listing on the NSE,” Marshalls said.