AA Kenya selling shares at Sh50,000 in capital raise

Motoring services association AA Kenya is selling shares to new members at a price of Sh50,000 as it seeks to raise new capital for expansion and transform into a public company.

AA says its 102-year status as a society is restrictive in terms of business, adding that its members will soon become shareholders in a process called demutualisation.

“Full members will be the future shareholders of AA Kenya upon demutualisation. Currently, this is the only category of membership and is open to all,” the association says in the document inviting the public to join its ranks.

“One can now register by paying a one-off fee of Sh50,000 and a discounted fee of Sh40,000 for members who were in the AA register by October 19, 2021.”

AA does not disclose how much it plans to raise and neither did it disclose the size of its existing membership.

The association says those participating in the capital raise will benefit from future dividends and discounts on its services and those of its partners like TotalEnergies and DT Dobie.

AA reported a net income of Sh11 million in 2020, down from Sh79 million the year before on what it attributed to the impact of the Covid-19 pandemic.

Sales over the same period declined to Sh472 million from Sh722 million. AA projects its revenue and profits to grow exponentially over the medium term from the actual performance seen in the past.

The association did not publish its balance sheet which would show its assets and liabilities.

AA offers motoring-related services including road assistance, driver training, vehicle inspection, vehicle valuation, driver assessment, and vehicle running cost estimates.

Once AA becomes a public company limited by shares, it plans to use the capital raised to expand its business over the next five years.

It will venture into the service centre business in major towns such as Nairobi, Mombasa and Kisumu.

It will also open 42 new branches spread across the country. Other expansion plans are the setup of operations in Rwanda and Ethiopia and the establishment of a modern driving school equipped with modern technology like simulators.

“The strategic projects above are capital intensive and hence the need to raise capital,” AA said.