In regulatory filings made on Monday, AAA said the deal will see its shareholders take up no more than 5% in the new combined entity, which effectively means that Comarco shareholders will still end up holding a majority stake in the entity in what is known as a reverse takeover.
The straight equity buyout is valued at Sh3 billion ($30 million), with AAA also set to advance Comarco Sh600 million ($6 million) to settle existing debts and pay capital gains tax. Comarco‘s existing owners will be issued with new shares valued at 0.5 pence (Sh0.64) each in the deal.
“Large-scale infrastructure improvements (such as the SGR) only add to Mombasa’s strategic importance in the region,” said AAA Chairman David Lenigas in a statement.
Comarco, which was established in 1971 as Diving Contractors Limited in Mombasa offering commercial diving services at the port, operates a 16.45-acre private port facility in Mombasa, providing warehousing, transportation and logistics services mainly to oil and gas companies working in the Eastern Africa region. One of its main lines of business is the provision of a supply base for multinational oil firms carrying out offshore drilling projects, including Apache, Anadarko and BG Group.
Comarco’s port facility is also expected to host the 11,000 metric tonne LPG import and storage facility that is being built by international gas firm, Petredec Group, and local firm Rift Gas.
Apart from Kenya, Comarco also plies its business in Tanzania, Somalia, Mozambique, South Africa, Comoros, Reunion Island, and Mauritius.
The combined entity that will be listed at the LSE, riding on AAA’s listed status, will change its name to Agulhas Group Africa plc. The LSE filings show that Comarco held total assets worth Sh7.76 billion ($76.7 million) in its financial year ending September 2018.
The firm’s revenue for the year stood at Sh750 million ($7.4 million), with a net profit of Sh90.3 million ($891,000). Current Comarco CEO Simon Phillips is expected to take up the CEO role in Agulhas. AAA said that the new entity will also look to raise Sh1.5 billion ($15 million) through an equity issue to fund working capital and growth.
