Kenya: Del Monte withdraws legal case and instead enters partnership
The Thika-based beverage giant initially based the claim on what it called errors in the calculation of its share of profits from a joint venture it has been operating with Kakuzi.
The firm is said to have made a U-turn on its demand because of its need for land near its Thika plant to boost its production. The move is in line with a Sh1.7 billion expansion plan aimed at protecting its turf from rivals such as Coca-Cola.
“Del Monte Kenya Limited's claim for repayment of Sh109 million has been fully withdrawn and a joint project agreement entered into,” said Kakuzi Limited in a statement to the Nairobi Securities Exchange on Tuesday.
The company did not provide details, but sources privy to the deal say Kakuzi will provide land estimated at close to 1,000 hectares and its share of cash for pineapple production.
Del Monte, on the other hand, is expected to provide cash for pineapple production, process the fruit and market the produce.
The new deal is a relief to shareholders of Kakuzi who had been warned that the claim would hurt dividends and expansion plans.
Source: www.businessdailyafrica.com
