Business Daily: Eveready has entered into talks with three institutional investors to fund a multi-billion-shilling real estate project in Nakuru as part of its growth and diversification strategy. The battery distributor says it has received bids from the potential investors to fund its flagship project through either equity, debt or a mix of both.
Eveready, which last year shut down its battery factory in Nakuru, will this month complete the feasibility studies to determine whether to build a hotel, shopping complex or a housing project on the 18.5 acre piece of land where the plant sits.
“The board is currently in discussions with three institutional investors and it will narrow down on the nature of their partnership as we finalize on which project to undertake,” Jackson Mutua, Eveready’s managing director said.
“At the annual general meeting scheduled for mid-May, the board shall be seeking shareholder approval on the final project, the partnership specifics and also what to do with the idle factory equipment.”
Product diversification and a maiden venture into real estate is part of Eveready’s bid to reverse its fortunes after recording a Sh177.5 million net loss in the year ended September, reversing the previous year’s net profit of Sh45 million.
The Nakuru-based firm last October announced that low sales due to illegal imports of cheap batteries and high energy costs forced it to shut its production factory in favour of importing batteries from the Energizer Egypt plant.
The battery firm consequently laid off 100 employees at a cost of Sh110 million, further depressing its performance.
The firm’s annual production by the time the factory shut down was between 40 and 50 million batteries, down from the 180 million batteries it used to manufacture 10 years ago.
The company then announced that it would be delving into real estate in an effort to direct a business turnaround over and above expanding its product portfolio beyond batteries.
Eveready’s 18.5 acres of land is worth approximately Sh370 million while the company has previously said another two acres of prime land in Milimani, Nairobi – which has an unoccupied maisonette— could be priced a bit higher according to Mr Mutua.
“The real estate is part of our strategic plan to diversify our income. The board is currently focusing on our maiden project which will be on the factory land but thereafter we shall discuss the Milimani parcel,” said Mr. Mutua.