Mauritian multinational Alteo increased its stake in Transmara Sugar Company Limited from 51% to 69.2% at a cost of 973 million shillings ahead of a proposed restructuring of the miller’s ownership structure.
The additional stake, whose purchase price values the sucker at 5.27 billion shillings, was acquired from private Kenyan investors who co-own the company with Alteo, the company disclosed in an information memorandum ( IM) to shareholders detailing the proposed reorganization.
The multinational currently holds its stake in the Kilgoris-based miller through a cascade of two investment vehicles: Sucrière des Mascareignes Limited and Transmara Investment Limited.
“In the third quarter of 2022 (January-March), Transmara Investment Limited increased its stake in Transmara Sugar Company Limited from 51% in fiscal year 2021 to 69.23% in fiscal year 2022,” Alteo said. in the IM.
“The total consideration for the acquisition of this additional stake was $8.2 million (973 million shillings). The acquisition of the additional stake was financed from available cash and debt of $5.05 million. dollars (599.2 million shillings) contracted by Sucrière des Mascareignes Limited.
Transmara Sugar, which was established in 2011, produced 92,375 tons of sugar in the 12 months to June 2021, compared to 72,549 tons the previous year, thanks to favorable weather conditions in the cultivation areas of the cane.
The unit thus reduced its net loss for the period to 82.6 million shillings from 274.4 million shillings for the year to June 2020. Revenues fell to 7.25 billion shillings from 5, 07 billion shillings previously.
Alteo took control of Transmara Sugar in 2015, adding it to a portfolio of sugar companies in Mauritius and Tanzania, where it operates TPC Limited with an effective 45% stake.
Its shareholders, which include Mauritian conglomerates CIEL Agro Limited and IBL Ltd, now wish to transfer sugar production operations in Kenya and Tanzania under the Alteo umbrella and under their direct control under a new investment vehicle known as the name of Miwa Sugar Limited, which was incorporated earlier. This year.
Alteo will then focus on real estate development in Mauritius, according to regulatory documents, with Miwa taking over its sugar production subsidiaries. Alteo is the largest landowner in Mauritius, with land assets under management totaling over 15,000 hectares.
“One of the objectives of the restructuring is to better prepare Alteo to realize its real estate value creation strategy by putting in place a governance and management structure more focused on land management and development, and by increasing visibility on the contribution of Alteo’s real estate division to the return generated by the group’s assets,” the firm said in the IM.
He added that the transfer of sugar operators to Miwa will result in a governance and management structure focused on optimizing millers’ operations and their development, and improving their access to capital by targeting investors focused on growth potential. in Africa.
Alteo shareholders are expected to meet next month to ratify the restructuring process, with Miwa expected to start trading on the Mauritian stock exchange in November.