CMC Shareholders’ Vote Ends Six Decades of Public Listing

Updated: March 11, 2014
CMC Holdings

Shareholders of auto dealer CMC Holdings Monday passed a resolution to delist the firm from the Nairobi Securities Exchange (NSE), marking an end for the company’s 58 years listing at the bourse.

Dubai-based conglomerate Al-Futtaim Group has received acceptances for a takeover bid from 91.51 per cent of CMC shareholders, surpassing the capital markets regulator that allows it to compulsorily acquire shares of dissenting investors.

The delisting and takeover bid were approved Monday at an extra-ordinary general meeting (EGM) held at the Bomas of Kenya in Nairobi.

“The resolution to delist from the NSE was confirmed following acceptance by shareholders representing 91.51 per cent,” said Joel Kibe, the CMC board chairman.

Al-Futtaim is expected to pay Sh7.5 billion to conclude takeover of the company that had for decades been the sole franchise holder of luxurious vehicles brands Jaguar and Land Rover.

A group of CMC employees had sought court orders to stop the transaction over fears of their pension dues and uncertainty of their terms of employment.

But on Friday the Industrial Court declined to give them an order stopping the EGM and directed employees to raise issues on pension arrears be addressed by Retirement Benefits Authority.

Al-Futtaim is now expected to pay the shareholders by next month, 14 days after all approvals including those from all regulators.

The deal is one of the biggest foreign direct investment in Kenya in recent times and is expected to highlight the appeal of Kenyan firms to global companies, seeking a foothold in emerging African economies.

The Dubai firm had indicated that it will introduce more brands at CMC beyond its current stable of Volkswagen, Ford, Mazda, Suzuki, Case New Holland, MAN, UD, Maruti and Case Construction.

Al-Futtaim had said it will retain CMC’s corporate and brand name but will make changes to the board and management team.

The 86 non-unionisable employees had moved to court and claimed that the firm is yet to settle Sh46.5 million pension contribution arrears and feared the money will be lost in the event of takeover.

They further argued that Al-Futtaim is planning to retrench staff and it’s not clear who will shoulder their benefits.

CMC managing director Mary Ngige in a replying affidavit assured workers, saying shareholding will not affect contractual relationships that the firm already has with its staff.

Ms Ngige said the alleged pension arrears in 2011 occurred not because of the company defaulting in remitting its contribution, but due to fluctuations in the value of investment made and assets held by the scheme.



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