Deacons East Africa’s largest shareholders have lost about Sh1.2 billion in paper value since the retailer listed on the Nairobi Securities Exchange in July 2016, underscoring how badly the chain’s collapse has hit its backers.
Published on Wednesday, November 21, 2018 at 9:44, the latest shareholder register shows that many of the company’s top owners, including chief executive officer Muchiri Wahome, have held on to their stakes even as the share price fell sharply and the business moved into administration.
The 10 biggest shareholders together owned 82.2 million shares at listing, worth Sh1.23 billion at the time. That holding is now valued at only Sh36.8 million after the stock slid to 45 cents from its listing price of Sh15.
Mr Wahome still holds 4.31 million shares, equal to a 3.49 per cent stake. His holding has dropped in value to Sh1.9 million from Sh65 million at listing.
Diana Bird, who ran the company from 1986 to 2003, remains a significant shareholder with 9.46 million shares, or 7.66 per cent. Her stake is now worth Sh4.26 million, down from Sh147.6 million at listing, after she trimmed her holding by 377,920 shares.
The company was suspended from trading at the Nairobi Securities Exchange on Monday after entering administration last week. The board appointed Peter Kahi and Atul Shah of PKF Consulting as joint administrators.
Deacons’ listing terms allowed anchor shareholders to sell up to half of their shares, but the lock-in period expired in July 2018 when the stock was already trading at Sh1.40. The company had also been subject to a lock-in from its 2010 public offer.
Swedfund International, the biggest shareholder with a 17 per cent stake, has seen the value of its holding fall by Sh252.2 million to Sh7.8 million.
The family of the late businessman Charles Mwangi Gathuri, who co-founded the business with retired President Mwai Kibaki, holds 9.34 million shares through his widow Charity Wangui. Those shares are now worth Sh4.2 million, compared with Sh140 million at listing.
Betty Mwangi-Thuo, the late Mr Mwangi’s daughter, left the board in December 2017 and was replaced by Judy Kibaki, who is also a director and is linked to the family of retired President Mwai Kibaki.
Aureos East Africa Fund was exempted by the Capital Markets Authority from any sale restriction because of the structure of its fund. It still holds 6.83 million shares, or 5.53 per cent, after an attempted sale to Centum last year failed. The stake has fallen in value by Sh99 million to Sh3.08 million.
Deacons has been hurt by weaker consumer spending and by lost revenue after selling its Mr Price stores to franchise owner Mr Price Group of South Africa. Its loss widened to Sh229.5 million in the six months ended June 2018, from Sh180.4 million a year earlier, while revenue dropped to Sh378 million from Sh1 billion in the same period in 2017.
The retailer has since issued a profit warning for the year ending December 2018, adding to the pressure on a stock that has already been battered by the company’s financial troubles.
