Packaging and selling air has turned out to be one of the most lucrative ventures this year.
And if everything goes according to plan billionaire Baloobhai Patel is set to breathe a profitable air for years to come.
Carbacid Investments in a joint partnership with Aksaya Investments has placed a Sh1.2 billion takeover bid for BOC Kenya, a transaction set to birth a giant industrial gas business.
Aksaya Investments is owned by Patel who together with his wife are among the majority shareholders of Carbacid Investments with a 40.38 per cent stake.
Fifteen years ago, BOC, which owns a 5.38 per cent stake in Carbacid Investments, had made a similar takeover bid for Carbacid but flopped after a four-year regulatory frustration. Read More
It extended into a protracted legal battle with the Capital Markets Authority up to the High Court that saw the suspension of the two companies from trading at the securities exchange.
A cresfallen BOC returned share certificates it acquired from shareholders of Carbacid.
Now all eyes are on the capital markets regulator to see whether they will approve the new deal. The approval also needs a nod from the Competition Authority of Kenya.
BOC is a supplier of industrial, medical and special gases while Carbacid produces food grade carbon dioxide that is used in fizzy drinks.
Both firms control the largest market shares in their respective areas.
BOC has seen a peak in business with oxygen being key in the fight against Covid-19.Its main products include oxygen, nitrogen and dissolved acetylene which are used in hospitals.One of the effects of coronavirus is the attack on the lungs making it harder for patients to get enough oxygen into their bloodstream to support other body organs.In the financial year ended December 2019, BOC saw revenue from bulk medical gases rise by 79 per cent following the awarding of a “large public sector hospital tender.”By 2008, when BOC was sure it would acquire Carbacid, it was at the height of its powers.Its share price had hit Sh160 and it was recording good earnings and dividends were growing.The previous financial year, it had paid Sh9.25 dividend inclusive of an interim bonus of Sh3 per share, totaling Sh181 million in dividends.The firm had also invested some Sh128 million in an expansion plan to bolster its subsidiaries in Uganda and Tanzania.It also had the confidence of global firms with German outfit Linde Group owning 65.38 per cent of the gas manufacturer […]
