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Aga Khan Fund buys 2.4pc stake in Serena hotels owner
Aga Khan Fund for Economic Development Director Mahmud JanMohamed (left) chats with Industrial Promotion Services (IPS) Chief Executive Officer Galeb Gulam during a past reception on June 18, 2024.
The Aga Khan Fund for Economic Development (AKFED) is set to buy an additional 2.42 percent stake in TPS Eastern Africa, the owner of Serena hotels, in a private transaction.
The deal will raise AKFED’s ownership in the Nairobi Securities Exchange-listed firm to 67 percent from the current 64.58 percent.
AKFED had in 2022 also raised its stake in TPS to the current level from the previous 45.04 percent after converting its $14.5 million loan to the company into 100.4 million shares.
AKFED now plans to buy 6.85 million shares from Aga Khan University Foundation (AKUF) in a private transaction which has received regulatory approval.
AKUF and AKFED are independent of each other, but both are part of the wider Aga Khan Development Network (AKDN).
“AKUF is an endowment fund type investor, with its funds often used to support certain generalized or special investments and established to promote, support and encourage, for the benefit of people of all races, nationalities or faiths, training, teaching and research,” TPS said in a notice to shareholders.
“In this regard, AKUF has since achieved its investment objective in TPS EA and it now wishes to transfer the sale shares to AKFED,” the notice added.
AKFED says it has the capacity and experience to further invest in TPS and provide it with the technical support required to operate hotels and lodges in Africa.
The fund has applied to the Capital Markets Authority (CMA) to be exempted from making a takeover offer for the remaining shares in the Serena hotels owner.
“AKFED does not intend to make a take-over offer for the remaining shares in TPS EA following implementation of the proposed transaction and has applied to the CMA for an exemption under regulations,” the fund said.
An entity that acquires control in a listed firm but has no intention of implementing a full takeover can apply for exemption from the regulations which allow such applications for various reasons including facilitating a strategic investment in a publicly-traded company.
TPS reported a net profit of Sh570.9 million in the half year ended June, reversing a net loss of Sh30.2 million a year earlier on the back of higher revenues, foreign exchange gains and lower finance costs.
Sales increased to Sh4.5 billion from Sh3.7 billion, with the company benefitting a resurgence of global travel for leisure and business.
The company says it has prioritized reducing debt and investing in its properties.
“Management will continue to pursue investments for the upgrade and refurbishment of the group’s hotels, resorts and lodges including technology upgrades and upskilling of associates in order to remain competitive,” TPS said when announcing the results for the six months.
