Nairobi Business Ventures (NBV) is set to graduate to the main trading platform of the Nairobi Securities Exchange (NSE) after spending Ksh428.75 million ($3.57 million) on the acquisition of four firms in four months.
The shoe retailing firm, which is listed on the Growth and Enterprise Market Segment (GEMS), disclosed through its latest annual report that between April and August last year it acquired the following business ranging from automobile to aviation and the extractive sector: Air Direct Connect Ltd for Ksh15.54 million ($129,500), Delta Automobile Ltd (Ksh130.4 million, $1.08 million), Aviation Management Solutions Ltd (Ksh61.56 million, $513,000) and Delta Cement Ltd (Ksh221.25 million, $1.84 million).
The acquisitions were financed through the proceeds of the sale of 857.51 million shares equivalent to 63 percent of the total issued shares of the firm estimated at 1.35 billion shares.
The new shares were priced at Ksh0.5 ($0.004) per share, helping the firm to generate a total of Ksh428.75 million ($3.57 million) from the share sale.
The firm’s top shareholders include Shreeji Enterprises Ltd (Kenya) which controls 32.69 percent stake, followed by Delta International FZE (30.66 percent) and Soni Haresh Vrajlal (16.42 percent).
NSE chief executive Geoffrey Odundo told The EastAfrican that the firm’s swift growth puts it in a pole position for promotion to the main trading platform of the exchange from the GEMS market that is mainly reserved for the small and medium-sized Enterprises.
Currently, firms seeking to list on either the Main Investment Market Segment or Alternative Investment Market Segment must have a paid-up capital of Ksh50 million ($41,666.66) and net assets of Ksh100 million ($833,333.33). The firms should also have a minimum of 1,000 investors, a minimum free float of 25 percent and should have recorded profits for three years in the past five years.
Last year, NBV was acquired by the UAE-based Delta International FZE, with the new owners seeking to use the four companies — Air Direct Connect Ltd, Delta Automobile Ltd, Aviation Management Solutions Ltd and Delta Cement Ltd — to transform it from a struggling shoe retailing firm to an industrial unit.
Delta Cement which is expected to be the most significant subsidiary of NBV, is seeking to set up a cement manufacturing plant with an annual capacity of one million metric tonnes in Mavoko, Machakos County.
“There has been a growing demand for cement in Kenya and the prices of 50kg bags have increased significantly in the recent past. We foresee this demand being sustained over the long term thereby providing us with the opportunity to establish ourselves in the manufacture of cement,” according to the report.
“Management has obtained all the statutory requirements for the establishment of the plant. So far, the factory’s building plans have received the requisite approvals and we have also received approval for the environment licence.”
The NBV management are negotiating on the funding facilities for the project.
Kenya’s cement sector is currently dominated by Bamburi, National Cement Company, Mombasa Cement, Savannah Cement, Rai Cement and Ndovu Cement Ltd.
Delta International also owns other subsidiaries in the region including Delta Holdings Kenya (real estate), Shreeji Glass Uganda and Shreeji Chemicals Kenya, which has an annual sodium silicate production capacity of about 180,000 metric tonnes.
In 2020, NBV shareholders approved Ksh83 million ($691,666.66) capital injection by Delta International FZE.
They also agreed to allot and issue up to a maximum of 415 million ordinary shares of Ksh0.5 ($0.004) each in the company to Delta International subject to payment of the aggregate subscription price of Ksh83 million ($691,666.66) being Ksh0.2 ($0.001) per new share.
The shareholders also approved a proposal to change the structure of the firm’s nominal capital from Ksh50 million ($416,666.66) divided into 50 million shares of Ksh1 ($0.008) each, to Ksh50 million ($416,666.66) divided into 100 million ordinary shares of Ksh0.5 ($0.004) each. There was an increase in the nominal share capital of the company by the creation of 400 million new ordinary shares of a par value of Ksh0.5 ($0.004) each which rank at the same rate and have rights equal to the existing ordinary shares of the company.