On Monday, Centum investment said it has booked a Sh370 million ($3.7 million) loss on the sale of its last remaining drinks business Kings Beverage Limited to Danish Brewing Company EA Limited.
The investment firm said it received Sh130 million ($1.3 million) from the deal, which is a 74% decline of the total capital it has injected into the unit that is the exclusive distributor for Carlsberg and Tuborg beer brands.
“Centum made the decision to exit the business having deployed the internally approved investment amount of approximately Sh500 million into the business under the import model. Centum has received a total purchase consideration of approximately Sh130 million, which is a part-recovery of the amount invested,” said Centum.
“The approximate Sh370 million loss on investment represents 0.5 percent of the total assets of Centum.”
Danish Brewing Company EA Limited is a subsidiary of Bounty Global Management Company, which is incorporated in the US. Centum founded Kings Beverage in 2014 and had recently sought distributors to expand countrywide and boost its revenues.
Centum said the decision reflected a tougher market in the local drinks business amid competition from the gray market and parallel imports of similar products.
“It was evident that the business would not be able to scale up volumes to warrant the further investment by Centum into local production.”
In June 2019, Centum announced that it would offloading its entire shareholding stake in Almasi Beverages Limited (53.9%) and Nairobi Bottlers Limited (27.6%) to Coca-Cola Sabco East Africa (CCBA) for Sh19.5 billion ($195 million) to pay off debt and make new investments.
