Eveready East Africa Limited which is a power solution provider had called for an Extraordinary General Meeting on October 6th 2016 that would commence at 11am at Merica Hotel, in Nakuru to discuss on certain agendas. The main one primarily was to discuss on selling the 18.5 acre piece of land in Nakuru this is after disposal of its real estate plans. Eveready has been incurring loss for a while and was seeking approval from its shareholders so as to sell the Nakuru land where the Eveready East Africa Limited factory is located. Eveready will also be seeking consent to change its name to Eveready East Africa PLC.
A practicality study that was conducted on the land showed that it would not be concrete to develop a mixed used complex. This led to disbandment of their idea of development on that same land which they had earlier planned on developing a shopping mall and apartments. Mr. Mutua said that investing in a distribution center in Nairobi will balance their retail model which changed from a business model after its termination and remove the property rental costs.
Eveready had big plans for the land but has decided to dispose of the land so as to settle its debts and reduce interest burden and also to generate free cash flow. Eveready’s Managing Director had said that the company’s level of borrowing are unmanageable and the insistent high interest rate system continues to hurt the business and reduce the shareholder value.
In 2014, the firm had set up Flamingo Properties Limited so as to venture into the profitable real estate sector to boost their income because of the loss they had incurred from its battery business. This struggle was as a result of illegal imports of cheap batteries and high energy costs.
In 2015, Eveready made a loss of approximately Sh 77million and its loss would increase by 25% in 2016. It is to sell its assets; factory equipment, land staff houses and vehicles assigned to its former managing director. In the same year the company spent ksh104.1million on its financial costs as a result of its borrowing levels which include a foreign denominated currency. The sale is going to help fund investment in more productive areas of the company, as the Nakuru property has been idle since 2014 when the company closed its manufacturing facility.
Recently Eveready signed a partnership with Clorox Sub Saharan Africa Limited to distribute the Clorox bleach in the Kenyan market. This is one of the strategies being used by Eveready as part of its five-year plan aimed to increase the size of its business through diversification and increasing its efficiency. Eveready has also introduced its brand of powder washing detergent, Everclean to the Kenyan market.