Keroche Breweries chief executive Tabitha Karanja addresses the media on March 9, 2022, regarding the tax row with Kenya Revenue Authority (KRA). She asked the taxman to reopen the plant to stem huge losses. PHOTO | DIANA NGILA | NMG Naivasha-based Keroche Breweries’ owners have ruled out the possibility of selling the firm facing an uncertain future after the Kenya Revenue Authority (KRA) closed its factory over a Sh22.79 billion tax bill.
The finances of Keroche, a private company, are not publicly available but it is expected to struggle to raise the billions of shillings if the KRA has its way, placing the brewer’s assets and those of its shareholders at risk.
The taxman also imposed a freeze barring 36 banks from dealing with the 25-year-old family-owned brewer famous for its Summit Lager and Summit Malt beers.
Its aggressive stance against the brewer has fuelled speculation of a potential sale to raise the billions needed to clear the unpaid taxes.
One of Keroche’s founders, Tabitha Karanja, on Wednesday, ruled out a stake sale, accusing the KRA of frustrating a staggered clearance of the tax bill.
“Going to sell Keroche I don’t see it happening,” said Mrs Karanja at a media briefing.
“I don’t think it can be the best option. Everybody would want Keroche to survive so that we show that we can also do it.”
Keroche entered brewing in 2008 and had ambitions to grow its market share to 20 percent in an expansion partly funded by banks like Absa Kenya.
It had ambitions to list its shares on the Nairobi bourse through a public offering.
Diageo-controlled East African Breweries Limited (EABL) , with brands like Tusker beer and Johnnie Walker whisky, has a commanding lead in the market. But it has seen competition ratchet up in recent years from small local brewers and imports like Heineken beer.
Analysts reckon Keroche should consider a stake and assets sale to ride out the financial crisis.But Keroche has instead requested the KRA to grant it a grace period of 18 months to clear taxes in arrears while paying the current ones as they fall due.It has also appealed to the KRA to allow the reopening of the plant-based in Naivasha to prevent huge losses and lift the agency notices with the 36 banks, which demanded lenders wire cash from the Keroche accounts to the taxman’s bankers.Keroche said it has over two million litres of beer worth about Sh512 million in […]