Mending fences: James Finlays offers Sh560 million shares to South Rift locals
A signage at James Finlay Tea estates in Kericho County in this file photo.
Multinational tea estate company James Finlays Kenya has begun the process of offering 15 per cent shares in its estates to the local community in Bomet and Kericho counties where it operates.
It has now been revealed that the company, which has its roots in Scotland in the United Kingdom, has offered shares worth an average of Sh560 million (US$4 million) to the community.
The Kipsigis Highlands Multipurpose Cooperative Society (KHMCS) has formally launched a process for its members to buy the shares offered by the multinational in a deal expected to be completed within six months.
Sri Lanka-based multinational Browns Investments PLC is in the process of finalising a deal with the Finlays to take over their estates for an undisclosed sum, with the stake (15 per cent) retained for the local community to be managed through a co-operative.
James Finlay, which has operations in the UK, USA, Sri Lanka, Dubai, Kenya, Argentina and China, will however continue to process and export manufactured tea products in its market niche.
Browns Investments PLC is part of the LOLC Holdings PLC group of companies, headquartered in Colombo, which owns Maturata Plantations, Hapugastenne Plantations PLC and Udapuselawa Plantations and has 49 estates covering 30,000 hectares with 10,000 employees.
The move into Kenya comes two years after Browns acquired James Finlay's estates in Sri Lanka.
Mr John Terer, the chairman of Kipsigis Highlands Multipurpose Cooperative Society, said KHMCS currently had 114,337 shareholders with Sh527,216,995 worth of shares.
Cooperative societies that have shares in Kipsigis Highlands Cooperative Society are - Sinendet, Mau Tea, Chepchabas, Finlays Outgrowers Group, Kimbilio Daima, Bureti Housing, Tai Group and Kiwoto Farmers.
Mr Terer said prospective members of the new investment vehicle will be allowed to buy a minimum of two shares at Sh5,000 each, which in effect means that apart from the Sh500 registration fee, an individual entry point will be Sh10,000 and a maximum of Sh100 million worth of shares.
"Corporate organisations will buy a minimum of 250,000 shares at Sh20 per share, which equates to Sh5 million," said Mr Terer, adding that the company will hold shares on behalf of a large section of the local community.
On completion of the deal, the cooperative will appoint a representative to the board of Browns Investments Plc, which will also have taken over the management of the properties.
"The shares of the society will carry a right of pre-emption in favour of the majority shareholder in the event that the society wishes to dispose of all or part of its shares," Mr Terer told a special annual general meeting (AGM) at the factory offices in Chepchabas, Konoin Constituency.
Mr Joshua Terer, the secretary of the cooperative, said the cooperative would not take over the estates, but would only buy a stake in the multinational tea company.
Mr Geoffrey Rono, the company's Chief Executive Officer, said that KHMCS has 1,500 acres of land, of which 1,100 acres are tea plantations with a factory that processes 80,000 kilograms of green leaf per day.
James Finlays Group Corporate Affairs Director Ben Woolf and Browns Investments PLC Director Kamantha Amarasekera recently met with Bomet Governor Hillary Barchok and his Kericho counterpart Dr Erick Mutai to explain the takeover bid and offer to the local community.
"James Finlays has made a strategic management and business decision to move away from tea growing to focus on tea extraction for our various markets," said Mr Wolf.
Mr Wolf admitted that Finlays did not carry out the required public participation processes, as this would have created many challenges that could have prevented the deal from going through, but instead chose to directly identify a cooperative with an established presence in the region.
For his part, Mr Ameraseka said Browns PLC would retain all employers and foster relationships with the local community.
"We are proud to take a company with such a proud heritage into a new phase of sustainable growth. James Finlay Kenya is an incredible business driven by an incredible community and it has an exciting future. We warmly welcome all members of the James Finlay Kenya team to the Browns family," said Mr Amarasekara.
