Monday, December 9, 2013

REA Vipingo to remain in sisal farming

R.E.A. Trading Limited has announced that REA Vipingo Plantations Limited (RVP) will not divest from large-scale sisal growing even after the conclusion of the proposed buyout of the sisal producer’s issued shares.

Richard Robinow, the chairman of the R.E.A. Trading which currently holds 57 per cent of RVP, said that to protect the sisal business, and the employment that the company provides in Kenya and Tanzania, RVP will need to expand its existing business into new areas such as utilisation of bio-mass and bio-gas. 

Mr Robinow further commented: “We will move ahead with the transaction subject to the relevant regulatory approvals. Our commitment is to the thousands of Kenyans and Tanzanians, their families and the local communities that derive their livelihoods from the sisal plantations and the associated commercial eco-system.

Ultimately, we are plantation people and we intend to retain our controlling interest in the sisal operations of RVP.  We are not real estate people and have no expertise in real estate development but we do understand the sisal business and its heritage, backed by 30 years of experience.

The expansion of the group’s business into new areas will require RVP to commit new capital to diversification and to take significantly greater financial risks than it has hitherto assumed.  It would be easier to do this if the group’s operations were privately held.”

In view of developments since R.E.A. Trading made its offer for RVP, R.E.A. Trading is evaluating options for the better creation of value from RVP’s assets for the benefit of all stakeholders, including its minority shareholders.

On November 13, 2013, R.E.A. Trading, announced its intention to take over 100 per cent of the issued shares of RVP which is listed at the NSE.
The proposed buyout is at the price of KS. h40 per share, which is 42 per cent premium, and values the firm at nearly Sh2.4 billion.

R.E.A. Trading is in the process of seeking regulatory approvals and meeting transactional conditions for the deal. Its decision to steadfastly remain in sisal farming is further reinforced by the company’s commitment to the Kenyan economy, its robust agriculture sector and its people.

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