19 February 2018

Ethiopia: Asella Malt Grabs One of the Highest Offers for Privatisation

The transfer is a road-map for liberalisation

Asella Malt Factory joins the list of public enterprises, grabbing the highest offer of 1.34 billion Br after the Ministry of Public Enterprises (MoPE) put it up for privatisation.

The Factory joins the highest offer earner companies next to the 944 million dollars bid made by Japan Tobacco International for National Tobacco Enterprise (NTE) and 225 million dollars of Diageo Plc's offer for Meta Abo Breweries S.C.

Oromia Agricultural Cooperative Federation, founded by members of agricultural unions, made the highest offer to acquire the Company during the financial opening held for the Factory on February 12, 2018. Calypso Agribusiness Ltd, Souflet Ethiopia Plc and Malt Africa vied for the acquisition with Oromia Agricultural Cooperative Federation.

Malt Africa, a sister company of Bavaria which is the major shareholder of Habesha Beer, gave the second highest offer of 1.1 billion Br. Calypso and Souflet Malt offered 977 million Br and 27 million dollars, respectively for the Company which has an annual production capacity of 360,000qls.

While the three companies proposed to pay between 30pc and 35pc of their offers in advance and the balance within five years, during handover, Souflet proposed to make the full payment at once.

The Factory which was established in 1984 on 14.7ha has been one of the strategic enterprises in the country as the major malt supplier along with Gonder Malt owned by Dashen Breweries. Asella Malt fulfils around 40pc of the local malt demand in the country.

It also supplies malt to the seven operational breweries in the country, having a production capacity of over 12.6 million hectolitres of beer requiring a minimum of 236,280tns of malt a year. Imports cover the remaining 156,600tns of the demand.

Some months back the paid-up capital of Asella Malt was raised to 232.2 million Br from 21.3 million Br, following a regulation approved by the Council of Ministers (CoM).

For the cork and can manufacturing factory only CGF-Business Group offered 130 million Br to acquire the government's share in the company. The government has a 75pc stake while private investors possess the remaining.

"The government will privatise all state-owned enterprises step by step as a strategy," said Wondarfash Assefa, communications director at the Ministry.

Since its establishment two decades ago, the Ministry has privatised a total of 377 public companies with 96pc of the payment fully settled. Out of the total companies, 87pc were transferred to local buyers.

UPDATE: This article was amended on 19 February to change the bid amount from 510 million dollars to 944 million dollars in the bid made by Japan Tobacco International for National Tobacco Enterprise (NTE).


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