NAIROBI, Kenya, Sep 8- Eveready East Africa Limited has set in motion plans to dispose of its 18.5 acre piece of land in Nakuru to support its business.
In a notice published on September 8, 2016, the listed company has called an Extraordinary General Meeting (EGM) on October 6 where it will seek the greenlight to dispose of the property.
It will also be seeking approval to change its name to Eveready East Africa PLC.
“The company’s levels of borrowing are unsustainable and the persistent high interest rate regime continues to hurt our business and erode shareholder value,” Eveready’s Managing Director Jackson Mutua said.
According to the published accounts of 2015, the company spent Sh104.1million on finance costs due to its borrowing levels which includes a foreign denominated currency component which contributed significantly to the loss recorded in the year.
“This sale is also part of management’s strategy to unlock funds for investment in more productive areas of the company,” Mutua said.
The Nakuru property has been largely idle since the company closed its manufacturing facility in 2014.
“A feasibility study conducted on the property failed to give an unequivocal go-ahead for the development of a mixed used complex. Investing in a distribution centre in Nairobi complements our retail model and eliminates our property leasing costs,” Mutua added.
The company’s business model changed to a retail one with the cessation of manufacturing in 2014.
Eveready continues to pursue various initiatives as part of its five-year strategy aimed at increasing the size of its business through diversification and increasing efficiency in its business processes and in that regard recently signed a partnership with Clorox Sub Saharan Africa Limited to distribute the Clorox bleach in the Kenyan market.
The EGM will commence at 11am at Merica Hotel, in Nakuru.