DOUBTS ARISE OVER ACQUISITION OF ALIOS FINANCE BY VAELL

Doubts have emerged when the regional leasing firm, Vehicle and Equipment Leasing Limited (VAELL), through one of its subsidiary will conclude the process to acquire Alios Finance in Kenya, Tanzania and Zambia due to coronavirus epidemic. It is not clear when the transaction that begun last year will be concluded. According to sources privy to the transaction, at the moment everything is at standstill since no physical meetings can be held. The directors from both sides are non-committal due to Covid 19 that has affected economies around the world severely. Since the eruption of the virus in Wuhan China late last year many businesses have been affected especially with travel restrictions. According to the management of the lessor at the moment no meetings can be held casting fears of the deal’s fate.

In the deal, the regional leasing firm was to buy  assets from the Pan African leasing firm making it major stakeholder in these three countries and therefore controlling its operations in those three countries. Alios Finance operates in 9 Sub-Saharan countries including Tunisia, Burkina-Faso, Cameroon, Ivory Coast and East African countries. Should this acquisition go through the Naivasha headquartered lessor will become the major lessor in Tanzania and the largest leasing network in Africa. This will enable them to deepen their involvement in Africa and especially in Zambia.

The transaction epitomizes an important step in the firm’s regionalization and expansion strategy. This will significantly enhance new market uptake capacity, bolstering its presence in East Africa and further solidifying their position as the largest lessor in Africa. After this move, it will now be setting sights on Ghana, DRC and Mozambique. It has a correspondent relationship with other leasing companies in Southern Africa and Asia.

This purchase comes after the financial markets commission (CMF), which regulates the Douala Stock Exchange (DSX), gave the green light to the Tunisia’s leasing firm to issue a bond intended to raise CFA8 billion (Kes. 1.4 Billion) in Cameroon last year. Alios Finance, a pan-African financial institution, since its establishment in 1954 has been offering SMEs and large companies financing solutions such as leasing, real estate finance, investment credit, hire-purchase and long-term vehicle rentals.

In this arrangement, negotiations are under way to have another West African partner join the Kenyan firm. This has also been put on hold due to the global economic uncertainties.

Alios Finance is reported to have been scouting for a stronger partner who understands the local market and is able to take control of the Eastern African region. With this acquisition, they are able to help the Tunis firm realize vision for the E. Africa as they now fully concentrate on core markets in West. Africa.

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