Marshalls EA plans NSE exit

After years of loss making, auto dealer Marshalls East Africa has announced plans to delist from the Nairobi Securities Exchange (NSE).

The plan to remove the company from trading on the bourse is expected to give Marshalls greater flexibility in changing its business strategy.

Global Limited which is the majority shareholder in Marshalls EA with a 13.9 percent stake, has offered to buy out minority shareholders who do not wish to continue being investors once the firm delists.

Already Marshall’s top 14 shareholders, controlling 83.14 percent of the company have signed off on the delisting plan and will remain as shareholders.

“The company recognizes that it has a diverse shareholder base and that not all will want to be part of a delisted company. Global Limited has offered to purchase any shares held by minority shareholders if they should wish to exit,” Marshalls said in a circular to shareholders.

Global Limited said its prepared to offer minority shareholders Sh10.75 per share which is a 25 percent premium of the company’s six month trading average of Sh8.58.

Marshalls EA closed Monday’s trading session at Sh9.00.

Marshalls has been on a loss making path from 2012 when it posted a Sh165.5 million and Sh17.4 million loss from its 2016 full year.

The group did not immediately say which business opportunities it had lined up only saying delisting will give it space to return to profitability.

“The delisting will provide the company with the flexibility and time to restructure its business without prejudicing shareholders. The delisting will also reduce expenses related to maintaining a listing on the NSE,” the company said.

Marshalls is currently the distributor for South Korean car maker KIA Motors and will continue with the business even after delisting.

The auto dealer has over the years lost lucrative franchise contracts for Peugeot and Tata further compounding its woes.

Investment bank Dyer & Blair is leading the transaction which kicks off on May 10 with Marshalls planning to have delisted from the NSE on June 19.