Kenyan Market Tribunal Plans REA Vipingo Hearing After July 26

Kenya’s Capital Markets Tribunal will be constituted for the first time later this month, when it will set a date for a hearing into the takeover of REA Vipingo Plantations Ltd., Chairman Jinaro Kibet said.

The tribunal expects to decide on the timing of the hearing after July 26, when one of the members who is currently out of the country returns to Kenya, Kibet said in a phone interview yesterday from the capital, Nairobi. The government appointed two members to the arbitrator earlier this month to form a quorum.

Kenya’s High Court halted the takeover of Africa’s biggest sisal producer on May 21 after Centum Investment Co., Kenya’s largest publicly traded investment company, challenged the validity of an offer by REA Trading Ltd., REA Vipingo’s biggest shareholder with a 57 percent stake. Centum argues that U.K.- based REA Trading’s offer contains a “contingency” that violates Kenya’s Companies Act, according to the appeal submitted to the tribunal.

REA Trading has proposed buying the 43 percent of REA Vipingo it doesn’t already own for 70 shillings a share. It also said shareholders that accepted the offer would be entitled to a pro-rata share of dividends or distributions of proceeds from the potential future sale of land for as much as 15 shillings per share. Centum is offering 75 shillings a share for the company.

Earlier this month, the Court of Appeal upheld a High Court decision denying Vania Investment Pool Ltd., a closely held Kenyan company, from bidding for REA Vipingo after it missed a Feb. 28 offer deadline. Vania is consulting its lawyers about the decision, Dilesh Bid, a director of the company, said by phone July 14. He declined to comment further.

Market Value

REA Vipingo was suspended from trading on the Nairobi Securities Exchange after REA Trading made an initial cash offer to acquire the company. The stock last traded on Nov. 13 at 27.50 shillings, giving the company a market value of 1.65 billion shillings ($19 million).

REA Vipingo operates two sisal estates in Kenya that produce about 12,000 metric tons a year of the fiber, which is used to make rope and dartboards. Three of the company’s estates in Tanzania produce more than 7,500 tons, according to its website.

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