British multinational tea packer Global Tea & Commodities has sold an equity stake to three European financiers, raising funds for expansion of its Kenyan unit, which packages the Kericho Gold and Baraka Chai tea brands.
The three firms—French development finance institution Proparco, Danish sustainable investment fund IFU and London based investment and advisory firm Si Advisers LLP—did not disclose the amount invested or the size of equity they are taking up.
They however said that the bulk of the money will be going towards Global Tea’s Mombasa packaging unit, with the remainder being deployed in its Malawi operation.
“The proposed investment will assist Global Tea in building a new tea packaging facility in Mombasa, and support the group’s expansion plans in Africa,” the firms said in a joint statement.
The closing of the transaction is subject to regulatory approvals, they added.
Global Tea was founded in 1992 by Indian businessman Nadeem Ahmed as a trading firm, later expanding to tea blending, and operating coffee and macadamia plantations across East Africa.
Mr Ahmed said that the new round of fundraising will complement other recent capital injection moves as the firm looks to expand its footprint in Africa and upgrade its value addition capacity in existing factories.
“This commitment by the European development finance institutions follows a debt raise we concluded from the International Finance Corporation (IFC),” he said.
Proparco deputy head of equity for Africa and the Middle East Tibor Asboth said that the fund expects that its investment will benefit smallholder farmers who supply global Tea and consumers of its products.
The French fund has been actively lending to Kenyan businesses in the recent past, including a Sh10.8 billion loan issued to Equity Bank in October last year for onward lending to small and medium-sized enterprises (SMEs).
In August 2020, it also provided a Sh2 billion ($18.7 million) loan to Kenya Nut Company, earmarked for short-term cashflow needs and expansion.