Businessman Chris Kirubi has received an additional Sh348 million as part of his staggered payment following the sale of his BIC stationery, lighters and shavers franchise to French multinational Société BIC, which owns the brand.
Mr Kirubi, through his manufacturing unit Haco Industries Kenya Limited, was paid an initial Sh703 million in the deal which was completed on December 31, 2018.
Société BIC later announced that Haco was entitled to an additional deferred payment amounting to €9.9 million (Sh1.2 billion) over three years, raising the total compensation to nearly Sh2 billion.
The conglomerate paid Haco €2.4 million (Sh309 million) last year and another €2.7 million (Sh348 million) in the half year ended June, according to a trading update.
“An additional amount of 2.7 million euros related to the acquisition of Haco Industries Kenya has been disbursed in the first half 2020,” BIC said in the disclosure.
The delayed payments have seen Mr Kirubi benefit from the weakening of the Kenyan shilling, resulting in receipt of larger amounts as measured in the local currency.
The shilling has depreciated about 10 percent to trade at 128 units against the euro since the start of 2019.
Cumulative payouts to Mr Kirubi now stand at Sh1.3 billion, with the remaining balance of Sh610 million expected by the end of next year.
Once all the payments are in, Mr Kirubi’s profit in the deal will stand at more than Sh600 million, representing the premium on the value of assets transferred to the French multinational.
The businessman earlier told the Business Daily that the deferred payment was due to the capital commitments Haco had already made in the BIC business by the time the transaction was completed on December 31, 2018.
Société BIC took over manufacturing facilities in Kenya and distribution of stationery, lighters, and shavers in East Africa, with Haco retaining ownership of the properties which it has leased to the French firm.The multinational launched the facility, which serves as its office and production hub for East Africa, on March 11, 2019. BIC says the move to take over its franchise from Haco led to strong sales growth last year.“In the Middle-East and Africa region, the performance was driven by a successful change in route-to-market in East Africa, thanks to the transfer of Haco Industries’ manufacturing and distribution activities, which led to a double-digit increase in net sales in the region,” the company said without giving figures.BIC has taken loans of €2.77 million (Sh355 […]