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A fund manager controlled by South African financial firm, Old Mutual Limited, targets to buy a controlling stake in a Mombasa-based grain firm owned by tycoon Mohamed Jaffer.
Disclosures by the Comesa Competition Commission revealed that African Infrastructure Investment Managers (AIIM) plans to acquire an unspecified controlling stake in Incorp Limited, a holding company of Bulkstream Limited owned by Mr Jaffer.
AIIM targets to acquire the stake in Incorp through a special-purpose vehicle known as African Drybulk Limited (ADL).
“The parties have submitted that the proposed transaction presents an opportunity for AIIM to support the development of Bulkstream’s business in Kenya and Uganda and achieve positive outcomes by means of promoting secure and efficient logistics infrastructure,” the Comesa agency said in a disclosure.
A top official at Bulkstream confirmed the acquisition proposal but said it was still at a preliminary stage.
“A proposal was made but there is nothing concrete yet. The proposal is at a very early stage,” the official told Business Daily and requested anonymity citing sensitivity of the matter.
AIIM did not immediately respond to an email from the Business Daily seeking comment and details of the proposed deal.
Bulkstream Limited rebranded from Grain Bulk Handlers Limited (GBHL) early this year after diversifying into different products.
The company, which commenced operations in 2000, specialised in terminals for handling bulk grain imports and is the sole operator for mechanical bulk grain handling at the Port of Mombasa, but currently handles various dry bulk storage of grain and fertiliser, as well as edible oil, fuel and bitumen.
A key feature of the Bulkstream facility was the storage silos located outside the port area with a total of 220,000 tonnes of grain storage capacity with three discharge port lines to a modern conveyor system that transfers the grain from the ship hatch to the silos.
The facility has a discharge rate of 600 tonnes per hour and 12,000 tonnes per working day with a bagging terminal and bulk rail and road loading facilities.
According to the Bulkstream website, the company has increased handling facilities to include 65,000 tonnes of clinker, 45,000 tonnes of fertiliser, edible oil tankers, fuel oil and bitumen.
Bulkstream’s monopoly on grain handling at the Mombasa port ended earlier this year after the Court of Appeal allowed a second company to set up shop. Court of Appeal judges Pauline Nyamweya, Imaana Laibuta, and George Odunga found that the High Court erred in stopping Kenya Ports Authority (KPA) from awarding Portside Freight Terminals the deal for building a second facility at the port.
Portside is linked to the family of Mining Cabinet Secretary Ali Hassan Joho.
The three judges said awarding the contract to Portside was not discriminatory and that the KPA and the Treasury did not breach the Constitution in tapping the firm.
The Supreme Court in July, however, temporarily stopped the construction of the second grain bulk handling facility by Portside. The apex court presided by Deputy Chief Justice Philomena Mwilu ruled that public interest lies in stopping the construction, pending the determination of the appeal filed by Dock Workers Union and Busia Senator Okiya Omtatah.
Mr Omtatah and the union have challenged the process used to award the tender to Portside Freight Terminals Limited, Portside CFS Ltd, and Heartland Terminals Ltd. The matter remains active in court.
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