Bamburi Plans Sh12bn Sale of Ugandan Subsidiary

Bamburi Cement is poised to divest its 70 percent stake in Ugandan subsidiary Hima Cement for $84 million (Sh12.7 billion), enhancing its liquidity. The move, accompanied by Cementia Holding AG’s sale of its 30 percent stake for $36 million (Sh5.4 billion), will result in the complete ownership transfer to a consortium comprising Sarrai Group and Rwimi Holdings.

Upon completion of the transaction, Sarrai Group Limited and Rwimi Holdings Limited will jointly own 100 percent of Hima Cement Limited, marking its departure from the Bamburi group to become part of the Sarrai group, as per Bamburi’s announcement.

The overall deal value of $120 million (Sh18.2 billion) is subject to adjustments post-transaction completion, as stated by the Nairobi Securities Exchange-listed firm. For Bamburi, this divestiture offers capital unlocking, enabling a heightened focus on its more profitable Kenyan business.

In the fiscal year ending December 2022, Bamburi’s Kenyan operations yielded a net profit of Sh258 million, reporting revenue of Sh20.5 billion. Conversely, Uganda, with comparable sales of Sh18.4 billion, incurred a net loss of Sh77 million during the same period. The group’s consolidated net income of Sh181 million underscores the impact of the Ugandan operations on overall earnings.

Bamburi, primarily engaged in cement manufacturing and sales, with over 95 percent of its business concentrated in Kenya and Uganda, will continue operations seamlessly in Kenya. The remaining business activities involve the production and sale of ready mix concrete, precast products, and quarry rehabilitation for raw material sourcing in cement production.

In a separate press statement, the company clarified that the transaction’s completion will not disrupt Bamburi Cement Plc’s operations in Kenya, emphasizing the strategic shift towards concentrating efforts on the Kenyan market.