By PATRICK ALUSHULA

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Bamburi Cement has sold its entire stake in Ugandan subsidiary Hima Cement for an estimated $84 million raising prospects of rewarding shareholders with a special dividend.

The Nairobi Securities Exchange-listed firm said Thursday the sale of the entire 70 percent stake to a consortium of Sarrai Group and Rwimi Holdings was completed on March 5 after it received all the regulatory and shareholder approvals.

The completion of the deal injects the amount into Bamburi’s books, giving it room to pay a special dividend, subject to the capital allocation plans reviewed by the board and management as it was promised to shareholders through the circular that preceded the deal.

“The proceeds received from this transaction … (provide) ability for Bamburi to pay a special dividend to its shareholders, subject to Bamburi’s dividend strategy and receipt of relevant approvals,” the company announced in the circular.

The cement manufacturer will soon announce its results for the year ended December. The prospect of the special payout has lifted Bamburi’s share price to current levels of Ksh42.50 ($0.30), near the 52-week high of Ksh43.4 (0$.31) recorded on February 28.

Read: Bamburi completes sale of Uganda subsidiary

A special dividend will be a boost to Bamburi investors considering that the firm in July last year paid a dividend of Ksh0.75 ($0.0053) per ordinary share amounting to Ksh272 million ($1.92 million), marking a 79 percent cut from the Ksh3.75 ($0.026) per share or a total of Ksh1.3 billion ($9.15 million) that had been distributed earlier.

The cut in dividend was on the back of Bamburi net profit dropping by 86.9 percent to Ksh181 million ($1.27 million) as sales reduced and costs increased.

The Hima unit has historically had a limited dividend distribution record for shareholders, with the last two payouts coming in 2023 and 2016.

Bamburi had told shareholders the cumulative statutory net profit of Hima over the five-year period to end of 2022 has been about Ksh965 million ($6.8 million) compared with Ksh5 billion ($35.21 million) for Bamburi.

As such, it said, the sale of shares in Hima offers it a “decent on off return” on its investment.

The cement-maker also sees the sale of Hima allowing it to focus its efforts and invest further in its operations and business in Kenya.
The firm said in a notice that the deal was completed after all the conditions precedent to the transaction were satisfied.

“Following the completion of the Transaction, Bamburi has fully divested its proprietary interest in Hima Cement Ltd and Hima will no longer be reported as a subsidiary of Bamburi,” said the firm.

Read: Bamburi Cement signals dividend from $84m Uganda deal

Bamburi mid-November 2023 announced that it intended to sell 1,335,600 ordinary shares in Hima Cement Ltd — representing 70 percent of the total issued shares.

The shares were owned by Bamburi through its parent company, Himcem Holdings Limited.

The cement manufacturer’s shareholders endorsed the transaction on December 14, 2023, through a virtual meeting, followed by other regulatory clearances.