Aureos East Africa Fund, a 2003 vintage fund which joined The Abraaj Group‘s stable of funds following the acquisition of Aureos Capital in 2012, has agreed to sell its 5.53% stake in Nairobi Stock Exchange-listed retailer, Deacons East Africa, to Centum Investments in an undisclosed deal. The sale, which is subject to regulatory approval, will be executed as a private or off-exchange transaction.
The $40 million fund first backed Deacons in 2006 since when, after a few false starts, the clothing and home goods retailer finally listed on the Alternative Investment Market segment of the Nairobi Stock Exchange in August last year. The company sells a variety of own brand and franchised international fashion, home style and sports and clothing brands through stores across East Africa. Net losses at the company more than doubled to KSh278 million in the year to December on the back of an over 7% drop in revenues caused by supply challenges from South Africa and lower customer foot traffic in the malls in which Deacons operates its retail outlets.
The fund is in the process of realizing its investments as its investment term comes to an end. Originally established in 2001 as a joint venture between two development finance institutions, the UK’s CDC and Norway’s Norfund, the fund’s strategy was to make equity and quasi-equity investments in small and medium enterprises in East Africa, particularly Kenya, Uganda and Tanzania. As well as Deacons, the fund also backed Athi River Mining, Athi River Steel, Bank of Africa, Cable Holdings, Dorini and advertising firm Obvidian.