Sunday, June 16, 2024
BusinessTiret acquires Kombolcha textile

Tiret acquires Kombolcha textile

Seven months after the Office of the Prime Minister awarded the two state-owned textile factories, Bahir Dar and Kombolcha, to Tiret Corporation, the endowment conglomerate has finally settled the 35 percent down payment for the two textile mills by making the payment for the remaining Kombolcha Textile Factory this week. 

It is to be recalled that Tiret has already made the down payment for Bahir Dar textile mill in April, 2017. In the latest development, Tiret has made similar payment for Komobolcha Textile Factory fulfilling its financial obligation to take over the two textile mills, both located in the Amhara Regional State.

Though the offer to purchase the two textile factories was made by Tiret Corporation, an endowment company affiliated to the Amhara National Democratic Movement Party (ANDMP), the latest payment for the transfer of Komobolcha was made by Ambassel Trading House PLC, a subsidiary under the Tiret umbrella.

Girma Amentea (PhD), Minister of Public Enterprises, and Mitiku Beyene, CEO of Ambassel and deputy CEO of Tiret, has finally inked the agreement on July 6, 2017 at the Ministry of Public Enterprises (MoPE) this week.

“We agreed to transfer Kombolcha to Ambassel because the company has provided us with a very comprehensive business plan,” Girma said.

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Kombolcha, located 363 km south east of Addis Ababa was established as a publicly held textile factory in 1986. By the end of 2013, its total asset was worth 174 million birr where it has received capital injection from the government in tune of 380 million birr to upgrade the textile mill.

The ministry has initially floated the bid for the transfer of the two mills around late, 2016. By the time, along with Tiret and another firm called UpFront Management and Consultancy PLC, a Pakistan-based company, has shown a strong interest to buy the facilities.

Nevertheless, the Pakistani company did not go further than showing interest leaving Tiret to be sole bidder in the tender.

Tiret has made a total offer for both factories while UpFront failed to do so. In this respect, the endowment conglomerate has listed 450 million birr and 315 million birr for the acquisition of Kombolcha and Bahir Dar textile factories, respectively.

The price from Tiret was below what the Ministry has reserved as a minimum price tag for the two plants. This has called for the intervention of the Prime Minister Office.

The ministry has pushed the matter to the PM’s office seeking an intervention on the matter.

Finally, the PM office gave a green light for Tiret’s offer granting them the permission to acquire the two textile factories.

After that, Tiret has taken almost four months to acquire the factories attributing the delay to limitation of cash. Following this, Tiret requested an extension for the settlement schedule.

The interest from Tiret to purchase Kombolcha and Bahir Dar came five month after similar offer was made by an individual investor, Dinku Deyass.

Dinku, a notable businessman known for his diverse investment portfolio in education, hotel and tourism has made a total offer 606 million birr for the two mills.

However, the ministry has reject the offer and decided to re-tender the bid.

This has helped Tiret to use the opportunity and acquire the textile factories.

This is not the first radio for both Tiret and the ministry. It is to be recalled that Tiret through its subsidiary, Tikur Abay Transport, has purchased Bekelcha Transport SC from MoPE.

Tiret, which was established in 1995 with 26.1 million birr in capital, now includes close to seven companies involved in transport, manufacturing and service under its umbrella.

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