Monday, July 22, 2024
BusinessPublic Enterprise Agency appeals injunction order

Public Enterprise Agency appeals injunction order

The Public Enterprises Holding and Administration Agency (PEHAA), has appealed a decision made in a Federal High Court following an injunction order where the earlier was forced not to transfer National Alcohol and Liquor Factory (NALF) to a private holding, The Reporter has learnt.

“We are going to appeal to a court to lift the injunction, Wondafrash Assefa, communication director of the Agency told The Reporter.

It is to be recalled that the privatization process of the factory was delayed following a claim where Berhane G. Medhin argued that the factory belongs to him.

Back in June, 2018, a local company called Lominat Beverages PLC gave a 3.62 billion birr offer to fully acquire the state-owned National Alcohol & Liquor Factory (NALF). At the time, the company managed to list a much better offer than its competitors. In this regard, the second and third offers came from Pure Alcohol & Beverages Manufacturing and Matadim Manufacturing Plc which listed 1.6 and 1.5 billion birr, respectively.

Lominat – established back in 2014 – has been in the business of alcohol and beverages since then. It is co-owned by Brook Worku, a former country representative for Diageo and Binyam Berhane, an Ethiopian businessman involved in an array of business areas. The latter is also involved in importing and distributing different alcohols and beverages including brands such as Smirnoff. The Company was also currently building an alcohol and beverages factory in Modjo, 30 km south of Addis Ababa.

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Since then, Lominat was processing document works to acquire the company. It also asked for an extension from the Ministry of Finance to settle the 35 percent advance payment. The Ministry approved and gave the company more time.

In the meantime, Berhane G. Medhin took his case to the federal high court claiming the factory belongs to him.

Berhane – a US citizen – has been contesting the government’s efforts to privatize the factory for years.

NALF was first established in early 20th century by a Greek businessman, Elias Papassinos. In the 1970s, NALF was nationalized by the Marxist regime.

The factory currently covers more than 40 percent of the alcohol and liquor market in Ethiopia. It is one of the most profitable state-owned enterprises managing to expand its profit over the years. With close to 700 employees, National Alcohol has managed to register a profit of 607 million birr back in 2016.

It is to be recalled that a new regulation was introduced to increase the paid-up capital of NALF. In this respect, it was expanded from 12.2 million birr to 221 million birr.

The factory, over the past few years, has consumed close to one billion birr in expansion and renovation of its plants. The factory has four plants located in Mekanisa, Sebeta, Akaki and Maichew.

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