This archive report was first published on 2 September 2021.
Kenya's First Unofficial SPAC: Delta's NBV and the Future of Corporate Takeovers ¶
On November 16, 2020, the Nairobi Securities Exchange suspended Nairobi Business Ventures (NBV) from trading, allowing for the completion of the company's restructuring exercise. This marked the beginning of a new era for NBV, as it transitioned from a loss-making shoe reseller to a diversified conglomerate with interests in cement manufacturing, aviation, and automobiles.
Delta International FZE, a Dubai-based company, acquired an 84% stake in NBV, injecting liquidity into the company and paving the way for its transformation. However, this acquisition has raised questions about the nature of NBV's business and its relationship with Delta International FZE.
Is NBV a Special Purpose Acquisition Company (SPAC) in disguise? A SPAC is a company that sets out to acquire other companies, listed and unlisted, with the aim of creating a portfolio of companies or a conglomerate. While NBV's restructuring exercise and acquisition by Delta International FZE share some similarities with the SPAC model, it is unclear whether NBV meets the traditional definition of a SPAC.
Since Delta's acquisition, NBV has identified three major businesses it wants to diversify its portfolio to: cement manufacturing, aviation, and automobiles. The company has already made significant progress in these areas, with plans to set up a cement manufacturing facility in Kenya and acquire Aviation Management Solutions Ltd (AMS) and Air-Direct Connect Ltd (AirDC) in the aviation industry.
As NBV continues to grow and diversify, it is essential to understand the implications of its transformation. Is it a SPAC in disguise, or is it something more? The future holds more, and it is up to investors and the general public to do their own research before investing in any security.
Disclaimer: This article is not an investment recommendation, and investors and the general public are advised to do their own research before investing in any security.
