NSE Kenya Listed Atlas African has on Friday announced that it has entered into a conditional sale agreement to dispose of its interest in its flagship glass bottle manufacturing facility in Addis Ababa, citing injustice from the Ethiopian government.
In a letter to shareholders, the company said the buyers who have expressed interest in acquiring the facility are Innovative Africa Investments Limited and Eagle Investments Limited. Atlas management added that the decision was in the best interest of the Company and its shareholders as a whole. However, the agreement is subject to shareholder in the upcoming AGM to be held on 14 December 2016.
Atlas said the Purchasers will pay cash sale price of US$1.6 million which will be settled in three installments. Atlas will also hold in treasury the 276.7 million ordinary shares of the purchasers parent company, representing an 18.5% stake.
In December 2015, the company announced a decision to place its Kenyan subsidiaries into liquidation and went ahead to raise an additional US$5 million from new and existing shareholders to be used for the construction of the Ethiopian project. In liquidating its kenyan business, Atlas noted downturn in the oil and gas industry, market adjustments and the failure of certain key clients to settle debts, together with increasing creditor pressure had led to the decision.
The company had also made significant progress with the implementation of the Ethiopian Project, having secured a 100 year land lease and even signed up an MOU with Ethiopian Brewery to supply glass bottles.