Africa-Press – Kenya. Audit and financial advisory firm PricewaterhouseCoopers (PwC) has invited interested firms for the business and assets of Kenyan clean-cooking fuel startup KOKO Networks.
PwC’s Muniu Thoithi and George Weru took control of KOKO Networks (in administration) in the first week of February after the company went bust.
The two are expected to work on a turnaround plan for the firm that, until its closure, served about 1.5 million low-income households in the country with alternative clean cooking solutions, specifically liquid bio-ethanol fuel.
It specialised in two-burner stoves and rode on its “KOKOpoint” ATM network located in local shops to provide an alternative to charcoal and kerosene, significantly reducing indoor air pollution for low-income, urban, and peri-urban families.
KOKO had invested over $300 million (aboutSh 38.7 billion) in its Kenyan operations, mainly the subsidised cooking stoves.
PwC’s move to invite an Expression of Interest (EOI) for KOKO assets sets the stage for a possible sale or liquidation, but also a potential capital injection.
An EOI in this context (for a company under administration) is non-binding and acts as a market-testing tool to identify potential buyers without immediately committing to a full, resource-intensive sales tender.
KOKO was placed into administration due to its inability to continue operating sustainably. This followed the Company’s inability to obtain the required authorisation to support its carbon credit export business to the compliance markets, which was a key component of the Company’s business.
“The primary objective of the administration of the Company, as set out in the Insolvency Act, is, to the extent possible, to explore the possibility of rescuing the Company, maintaining the business as a going concern and achieving a better outcome for the creditors than they would get in a liquidation,” PWC said.
Key assets of the company include the nationwide fuel distribution and retail network comprising KOKO Points (smart fuel dispensing machines), smart tanker systems, smart depot systems and motor vehicles (trucks and motorbikes).
PWC has also listed Software and Intellectual Property (IP) essential to the company’s operational and management functions, office furniture and fittings, laptops, monitors and other office equipment.
Review of the affairs of KOKO indicates that significant capital will be required to resolve the insolvency of the Company sustainably, the audit and professional services provider noted.
“The Administrators intend to run an investor/transaction process to explore credible options for either the going concern acquisition of the business and assets of KOKO or for the acquisition of specific assets of the company,” it said.
In line with the provisions of the Insolvency Act, pursuit of the envisaged investor/transaction process in respect of KOKO is subject to the approval of the creditors of the Company.
Interested parties have until February 26 (next week Thursday) to make submissions.
“This is not a tender or offer for sale. It is an invitation for expressions of interest only. The Joint Administrators reserve the right to accept or reject any EOI without assigning any reason,” PwC said.
