East African Cables Plc has reached an agreement to sell majority stakes held in its Tanzanian subsidiary to Msufini Tanzania Limited.
The deal will see EAC Plc sell 16.2 million shares held in EAC Tanzania to the Tanzanian chemicals manufacturer.
EAC says the deal which is still subject to approval by the Capital Markets Authority and Tanzania regulators as well as shareholders will help the parent company cut its overall debt by extinguishing debt currently held by the Tanzanian unit.
EAC Plc Chief Executive Officer Paul Muigai says the deal also forms part of the cables manufacturer five year strategy to boost revenue and ensure debt sustainability.
“Thus strategic move is a key plank in delivering EAC turnround plan by unlocking value to strengthen our cash flow and restructuring our balance sheet for sustained growth,” said Muigai.
Msufini Limited is a Tanzanian firm with interest in the manufacture of chlorine and sodium hydroxide.
“EAC Tanzania is well suited for our portfolio and fits into our growth plans,” added Judith Lambert, Msufini Limited Director.
EAC Plc now plans to enhance manufacturing capacity of its Kenyan division on the backdrop of rising demand from retail and wholesale categories for building and construction industry in Kenya.
The firm reported a 24.4pc increase in gross profits for the half year period in 2023 on account of higher sales as Earnings Before Income Tax Depreciation and Amortisation surged 114pc.
During the period, net income also grew 15pc.
