 Investor briefing 2007
Investor briefing 2006
EAC takes over TDCL
EAC completed the purchase of 51% shareholding in Tanzanian cable maker, Tanzania Daesung Cable Limited(TDCL).
The deal worth kshs 160 million was sealed at a ceremony in Dar es Salaam. The purchase of the controlling stake in the Tanzanian firm brought to a close one of the major cross border acquisitions by a publicly quoted Kenyan Company in East Africa.
EAC officials said that the payment would be made by through debt financing. The company indicated that it had immediately taken control of the management of the Tanzanian firm. Until the 21st of October 2005, the 51% stake in TDCL, the largest cable manufacturer in Tanzania was held by Nexans Korea.
EAC Chairman Zeph Mbugua described the acquisition as a statement of intent by the company. He said that the company needed to cement as well as grow its leadership position in East & Central Africa. Our goal is to acquire an ongoing operation that instantly augments our market and manufacturing capacity,Mbugua said. The foothold in Tanzania is seen as giving it a vantage position in the regional market. Under the East African Community Union protocol the company can export its products to Kenya duty free. Besides the firm is well positioned to get a piece of the construction boom in Uganda and Rwanda.
Though the Kenyan operation is bigger and boasts a wider product range, the Tanzanian operation produces copper products such as enameled winding wire that are not available in the Kenyan market. The buy in also gives EAC a foothold into the Southern African Development market (SADC) will it will enjoy duty free access. EACs commercial and technical agreement with nexans covers most of the regional markets.
Under the new arrangement, the Tanzanian operation will gain cheap access to raw material copper from Zambia. It is also hoped that TDCL, whose revenues are 75% aluminium based and 25% copper based, will shore up the copper business.
Over the past three years, TDCL has posted an average turnover of USD 3.3 million and pretax profits of USD 300,000. Last year, TDCL revenues dropped by half, following protracted contract negotiations between the government and Eskom on management of state utility,TANESCO, which accounts for 75% of TDCLS revenues.
This year, with Eskom firmly entrenched into the deal and the privatisation beginning to pay off, TDCLs fortunes have improved with pre-tax profits hitting a high of USD 438,000 at the end of the third quarter. With this deal there is potential for us to export to Uganda, rwanda, DRC, malawi, Mozambique aside from seeking alternative markets in shipping, mining and telecommunications sectors,said Mr Mugo Kibati the managing director East African Cables Limited.
EAC is looking at the possibility of cross listing on the Dar Stock Exchange (DSE). If it does, it will become the third Kenyan Company to cross list on the DSE. This will allow the Tanzania public to share in the ownership and growth of the company.
Nexans Korea Director, Francois Blondeau said his firms decision to divest from the region was informed by commercial and strategic reasons. He expressed his optimism that the continuing partnership between EAC and Nexans would ensure proper coverage of the sub saharan region. Nexans has a presence in the Southern Africa market through a commercial office in Johannesburg.
Shareholders approve buyout plan.
Shareholders of East African Cables Limited on 18th October 2005 gave the nod to acquire 51 percent equity of Tanzania cable maker. The Kenyan listed firm will take over Tanzania Daesung Cable Limited (TDCL), an extraordinary general meeting (EGM) in Nairobi decided.
The largest cable and conductor manufacturer in Tanzania (TDCL) is owned in majority by Nexans Korea, the leading cable maker in South Korea, state power utility company Tanesco and the Tanzania Development Finance Bank. Both own 10% and the remaining 29% being held by the Tanzania Treasury.
During the EGM, the chaiman, Zeph Mbugua told shareholders that transaction advisers would finalise financial and legal transactions within days of the approval.
It is expected that the negotiations for the 51% stake would be finalised with the South Korea firm ahead of the official signing in Dar es Saalam on Thursday 21st October 2005.
EAC to acquire 51% shareholding of TDCL
Notice is hereby given that East African Cables Limited has entered into an agreement to acquire all the shares of TDCL held by Nexan Korea Company Limited.Hence, East African Cables Limited will effectively own 51% shareholding of TDCL after the completion of the agreement. The transaction between the two parties constitutes a material change in the operations of the Company. East African Cables Limited has disclosed the forthcoming transaction in conformance with THE CAPITAL MARKETS ACT: (SECURITIES)(PUBLIC OFFERS, LISTING AND DISCLOSURES) REGULATIONS,2002 continuing obligations section. East African Cables Limited has also disclosed the agreement to the Nairobi Stock Exchange in conformance with previoulsy mentioned regulations.
Notice of an extraordinary general meeting
Notice is hereby given that an extrordinary general meeting of the members of East African Cables Limited will be held at the Holiday Inn Hotel, Nairobi, on Tuesday, 18th October 2005 at 11.00 a.m to transact the following business:-
Agenda
- To read the notice convening the meeting;
- To approve the boards recommendation for the Company to acquire the subsidiary.
In accordance with Section 136(2) of the Companies Act (Cap 486) every member entitled to attend and vote at the above meeting can appoint a proxy to attend and vote on his behalf.
EAC in partnership
EAC on 7th June 2005 signed a technical and distributorship agreement with Nexans, a French cable maker.The deal will see EAC become the exclusive distributor of nexans products in Kenya, Tanzania, Uganda, Rwanda, Burundi, Somalia, Ethiopia and the Democratic Republic Of Congo.
EAC Investor Briefing
EAC plans to expand the business in the region (Uganda, Tanzania, Rwanda, Burundi, Eastern DRC, Somalia, Ethiopia, Southern Sudan) - Southern Sudan a major opportunity of immediate growth. For more details download document below:
Investor briefing 3rd December 2004
(You will need Adobe Acrobat to view the PDF documents in this section. Acrobat is available free from Adobe website.)
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