Eveready to pay dividend from Sh1.3b property sale

Eveready shareholders are set to enjoy a dividend for the first time in nine years after they approved the sale of the firm’s Nakuru property.

Valued at Sh1.3 billion, Eveready management assured shareholders at an extraordinary general meeting that proceeds from the sale will be used to issue a dividend.

The shareholders on Thursday approved a special resolution to sell the 18.5-acre piece of land on which its closed factory sits including all equipment and other assets on it.

The piece of land has been valued at Sh837 million with the assets from the factory driving up the valuation.

Eveready last paid a dividend to shareholders in 2007 and has since been grappling with losses leading to the eventual closure of its battery manufacturing plant.

There was however heated debate when shareholders questioned the running of the company and why they had not been able to get a divided over the past nine years.

The shareholders questions why the board directors continued to enjoy huge bonuses while shareholders suffered.

Eveready Managing Director Jackson Mutua however told shareholders that the company was currently under serious financial strain with the capital injection also being used to settle old debt.

Eveready is indebted to the tune of Sh509 million and in 2015 spent Sh104 million on finance costs due to its borrowing levels.

Shareholders last enjoyed a dividend in 2007 of 45 cents per share.

In the six months to March 2016, Eveready posted a net loss of Sh58.9 million shillings and has since issued a profit warning.

Eveready had initially wanted to develop a mixed use property on the property in Nakuru, which accounts for 45 percent of the firm’s assets.

“A feasibility study conducted on the property failed to give an unequivocal go-ahead for the development of a mixed used complex,” Mr Mutua told shareholders.

Eveready has since ventured into fast moving consumer good distribution with revenue from battery sales tapering off.