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Sarrai Group sets aside $9.7 million to start operations in Mumias Sugar, despite court case from Julius Mwale

Sarrai Group, an Uganda-based conglomerate, is led by Kenyan businessman Sarbi Singh Rai, who is the group chairman.

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Julius Mwale.

Uganda-based conglomerate Sarrai Group, which won a leasing tender to operate the ailing sugar company Mumias Sugar, has announced that it has set aside Ksh1.1 billion ($9.7 million) to kick-start operations at the company.

According to Business Daily, Sarrai Group said the $9.7-million capital injection will serve as the first batch of capital in the ailing miller.

The group noted that the cash infusion will play a key role in Mumias Sugar’s initial operations. Subsequent capital injections will see the company move back to the path of sustainable growth as a going concern.

Sarrai Group is a leading conglomerate of diverse and interrelated agro-manufacturing companies, which maintains active operations and investments through its subsidiaries in Uganda, Kenya and Malawi.

The conglomerate is led by Kenyan businessman Sarbi Singh Rai, who is the group chairman.

It has already commenced operations at the Mumias Sugar Complex and has been plowing the miller’s cane plantation after taking over the assets of the sugar company on Dec. 23, 2021.

Its recent move to inject the initial $9.7 million into the miller’s operations comes off the backdrop of a court case by Kenyan businessman Julius Mwale.

Mwale recently requested a stay order against the receiver-manager Ponangipalli Venkata Ramana Rao from executing a lease agreement or contract in respect to the leasing and operations of Mumias Sugar’s assets.

The court case is hinged on the argument that Sarrai Group is not qualified to win the Mumias Sugar leasing deal after his company Tumaz and Tumaz Enterprises emerged as the highest bidder in the leasing tender to control the sugar company.

The Ksh17-billion ($150 million) leasing fee offered by the Ugandan conglomerate will be used to settle with Mumias’ creditors. The sugar company owes more than Ksh3 billion ($26.5 million) to banks such as KCB, NCBA and Stanbic Bank.

It also owes Proparco Ksh1.84 billion ($16.2 million) secured through its electricity generation plant and Ecobank Ksh1.77 billion ($15.6 million) through its ethanol plant.

East Africa

Australian tycoon Matthew Yates’ OreCorp moves to offload Australian assets to focus on Tanzanian gold

The assets include the Hobbes Prospect within the Yarri Project in the Eastern Goldfields.

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Matthew Yates.

Australian-based minerals company OreCorp Limited has announced its plans to demerge its Western Australian exploration assets, as it moves to focus on developing its gold project in Tanzania, the Nyanzaga Gold Project (Nyanzaga).

The demerger of the Australian assets, which is subject to shareholder and other requisite approvals, will see the mineral company part ways with Solstice Minerals Limited, a wholly-owned subsidiary that controls its Western Australian assets.

The Western Australian assets include the Hobbes Prospect (within the Yarri Project) in the Eastern Goldfields.

In line with the proposed demerger, OreCorp proposes to spin off Solstice by way of a capital reduction and in-specie distribution.

As a result, Solstice will undertake an IPO, apply for admission to the official list of the Australian Securities Exchange (ASX) and for a quotation of its shares on the ASX.

The company explained that the de-merger is a strategic move that will lead to a value unlock for all stakeholders and entities linked to OreCorp, as its Western Australian assets are currently undervalued within the company’s structure.

The management noted that the strategic move allows OreCorp to focus on the development of Nyanzaga in Tanzania, with Solstice focusing on the exploration of the Western Australian assets.

The recent move comes nearly one month after the company secured a special mining license from the Tanzanian government for its Nyanzaga gold project.

OreCorp Founder and Managing Director Matthew Yates said that, with the new mining license, it is time to demerge the company’s Western Australian assets and unlock latent value for shareholders who will continue to participate in Solstice via a pro-rata in-specie distribution.

“The demerger and IPO presents an exceptional opportunity to realize the inherent long-term value of these assets in a WA focussed corporate vehicle,” he said. “We also believe Solstice will attract stronger investor attention and valuation in a standalone entity, while allowing OreCorp to maintain its focus on developing Nyanzaga.”

Recently, mining companies have refocused their attention on high-grade mines and projects in Africa.

Nearly a week ago, BHP Group, a leading Anglo-Australian mining resources group, announced that it is on course to invest $100 million in one of Kabanga’s nickel projects in Tanzania, as the demand for electric vehicles triggers a surge in demand for the metal used in batteries.

The decision to invest $100 million in Kabanga Nickel comes nearly three years after the mining behemoth sold its last Africa asset in 2019 to focus on less risky mining jurisdictions, such as Australia, Chile, and Canada, which have been developed extensively.

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East Africa

Britam Holdings appoints Kenyan executive Charles Njuguna as acting managing director

Njuguna played a strategic role as finance director in the execution of the group’s turnaround strategy.

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Charles Njuguna.

Kenya-based financial services group, Britam Holdings Plc, has confirmed the appointment of Charles Kimani Njuguna as the acting group managing director.

Njuguna played a strategic role as finance director in the execution of the group’s turnaround strategy that saw its earnings surge in the first six months of 2021 above Ksh376 million ($3.3 million).

The appointment comes nearly a week after Zimbabwean businessman Tavaziva Madzinga announced his exit from the financial services holding less than 10 months after joining the group as managing director.

Recall that Madzinga was appointed as the group managing director on Feb. 1, 2021 to replace Benson Irungu Wairegi, who served the organization for more than 40 years, overseeing its growth and expansion from a small home service insurance company to a diversified financial services group.

As the acting group managing director, Njuguna will lead the organization during its transition period until the search for a new director is concluded.

The Kenyan executive joined Britam in March 2021, bringing more than 20 years of experience in the financial services industry across the East African financial sector.

Prior to his appointment last year, Njuguna was managing director at Faulu Microfinance Bank for three years. He also led the Finance Department of Old Mutuals Kenya, now UAP Holdings Limited, for over four years.

As a result of a mix of cost- and revenue-optimization strategies implemented by the management coupled with its new business structure, Britam reported a profit of Ksh376.3 million ($3.31 million) in the first half of 2021, up from the loss of KSh1.63 billion ($14.36 million) that it posted in the first half of 2020.

Britam is on course to earn Ksh13.95 billion ($123.3 million) from the sale of a substantial stake in Kenya’s largest financial services group, Equity Group Holdings, to the International Finance Corporation.

Experts believe the 11-percent premium on the deal with the IFC will see the Kenya-based financial services group expand its gains by about Ksh1.5 billion ($13.3 million).

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East Africa

Kenyan tech entrepreneur Eric Muli’s Lipa Later secures $12 million to expand in Africa

Lipa Later is a Kenyan consumer credit platform co-founded by Kenyan tech entrepreneur Eric Muli in 2018.

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Eric Muli.

Lipa Later, a Kenya-based startup operating the Buy-Now-Pay-Later (BNPL) model, has raised $12 million in a funding round led by institutional investors, as it prepares to enter new market segments while expanding operations in its current markets.

Lipa Later is a Kenyan consumer credit platform co-founded by Kenyan tech entrepreneur Eric Muli in 2018. The startup has grown into one of the leading BNPL platforms in East Africa, with active operations in Kenya, Nigeria, Uganda and Rwanda.

Since 2018, the platform has extended its offers to cover other retail options such as electronics, furniture, home appliances, it has also served more than 200,000 customers and delivered a yearly growth rate of about 100 percent.

The recently completed funding round is a mix of equity and debt financing, led by institutional investors Cauris Finance, Lateral Frontiers VC, GreenHouse Capital, SOSV IV LLC, Sayani Investments and Axian Financial Services.

The $12-million capital financing, which brings the startup’s total funding to about $16 million to date, will be deployed to expand operations within its current markets (Kenya, Uganda, Rwanda) and into new markets such as Nigeria, Ghana and Tanzania.

It noted that the funding will also allow the startup to provide its BNPL services to its substantial pipeline of consumers supporting Lipa’s exclusive partnerships with world-class merchants in Sub-Saharan Africa.

One of Lipa Later’s early investors, Samakab Hashi, partner at Lateral Frontier VC, said: “Over the last few years, we have watched Eric Muli, CEO of Lipa Later, and his team put together the building blocks for pan-African expansion and this round of funding takes Lipa Later one step closer to being the dominant Buy-Now-Pay-Later player on the continent.”

Muli, the co-founder and CEO of Lipa Later, said: “In the next 12 months, we are looking to grow and double our presence in the existing markets, even as we open in three to five new markets in Africa.”

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