Express Kenya Limited has de-listed from the Nairobi Securities Exchange (NSE) after several years of loss making and falling shareholder value prompting the Capital Markets Authority (CMA) to suspend the firm’s share trading on the exchange with effective December 4 2017.
The logistics firm it ceased trading at the NSE following a successful acquisition of 38.36 per cent of its ordinary shares by its Chief Executive Hector Diniz who owns investment firm Diniz Holdings Ltd. The transaction which is still subject to shareholder and regulatory approvals is valued at KshKsh74.7 million ($747,000).
It involves the sale of 13.58 million shares at an offer price of ksh5.50 ($0.05).
Express Kenya’s net losses widen last year (2016) at Ksh96.93 million ($969,300) compared to a loss of Ksh60 million ($60,000) in the previous year (2015), with a negative working capital of Kh17 million ($170,000).
The deal will be brokered by Dyer and Blair, law firm Hamilton Harrison and Mathews and Diamond Trust Bank. Express Kenya ran into headwinds after it lost its main logistics business line with East Africa Breweries Ltd four years ago — forcing it to lease out its fleet and equipment.
The firm, which has consistently reported losses for the past three years, then tried to go into the real estate business, breaking ground to put up 224 residential houses on 3.5 acres in four high-rise blocks comprising one, two and three-bedroom houses for Sh2 billion.
The firm’s troubles started way back in 2011 after the regional beer maker East African Breweries Ltd (EABL) terminated its distribution contract and replaced it with DHL.
The move plunged Express Kenya into loss as the EABL contracted accounted for more than half of its revenuers.
The loss of the contract forced Express Kenya to change its business strategy by diversifying into the real estate though the move is yet to improve its finances.
On Friday last week the firm’s stock on the NSE improved 1.35 per cent to Ksh3.75 ($0.03) per share from the previous day’s (Thursday) price of ksh3.70 ($0.03) per shares.