East African Cables PLC has disclosed its engagement in a share purchase agreement with Msufini Limited (Tanzania) for the sale of 16.3 million ordinary shares, each valued at Tshs 10.
This transaction represents 51% of the issued share capital of East African Cables Tanzania Limited to Msufini. The agreement is subject to customary conditions including approval from East African Company PLC shares and regulatory authorities.
East African Cables Tanzania, a private limited company based in mainland Tanzania, specializes in manufacturing cables for domestic and industrial lighting, as well as electricity transmission and distribution.
Conversely, Msufini, also a private limited liability company incorporated in mainland Tanzania, focuses on the manufacture and sale of water treatment chemicals within Tanzania.
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Upon completion of the sale, East African Cables Tanzania will no longer operate as a subsidiary of the company. This announcement has been endorsed by the Capital Markets Authority in Kenya in accordance with the Capital Markets Regulations 2023.
Further details will be provided to East African Companies PLC shareholders before a scheduled shareholders’ meeting to deliberate on the sale.
Additional announcements will follow upon finalization of the sale. This strategic move is part of East African Cables PLC’s initiative to streamline operations and concentrate on core business sectors.
The divestment of its stake in East African Cables Tanzania Limited will enable the company to focus its resources on other ventures and bolster its market competitiveness.
East African Cables PLC experienced a notable 24.4% increase in Gross Profit during the first half of 2023, attributed to heightened sales volumes in the retail sector, sustained market expansion, intensified marketing endeavors, and enhanced operational efficiency.
Moreover, Earnings Before Income Tax Depreciation and Amortization (EBITDA) witnessed a significant 114% improvement during the same period, with net earnings growing by 15% compared to the previous year.
The company continues to engage in export activities through distribution partnerships across the region. CEO Paul Muigai emphasized that this strategic transaction will substantially reduce East African Cables PLC’s debt by addressing EAC Tanzania’s debt, thus aligning with the company’s five-year growth strategy focused on organic revenue growth and sustainable debt management.
