Troubled automobile firm Mobius Motors Kenya has been fully acquired by Middle East-based investment and technology firm Silver Box in a transaction set to revitalise the sinking car brand.
In a statement on Tuesday, the Kenyan startup said Silver Box has already re-opened the service centre and resumed services of Mobius vehicles, adding that production and manufacturing will resume in full by July this year.
As part of the leadership transition, Mobius’ consultant and transaction advisor Shabbir Jivanjee has appointed a Mr John Kavila as the chief operations officer of the automobile, with the firm saying his expertise in manufacturing and operations will be instrumental in driving the company’s strategic expansion and growth initiatives.
“I am deeply honoured to lead Mobius Motors, a company renowned for its bold and innovative approach in creating a truly unique Kenyan brand,” said Kavila.
“Mobius Motors has built an exceptional foundation, and we are eager to build on this success by focusing on expanding our market share and increasing accessibility for Kenyan consumers,” he added.
Outgoing Mobius CEO Nicolas Guibert said they received three bids, out of which Silver Box’s offer stood out as the best choice, not only for ensuring continuity of the business, but also for driving its growth and success in the next phase.
In the pact, Silver Box has been described as a company that specialises in ‘driving business forward through intelligent investment, expert corporate management and advance technology.’
Competition Authority of Kenya (CAK) Director-General David Kemei told this publication that the transaction has already been approved, noting that it fell below the threshold that requires merging parties whose combined turnover or assets, whichever is higher, is over Sh1 billion, to seek approval from the authority before implementing the proposed transaction.
“Upon analysis of the information provided by the parties in their application, the authority determined that their combined turnover/assets was below the set threshold and, therefore, the transaction was approved in October 2024,” Mr Kemei said in an email response.
“This authority’s decision is by law informed by the fact that, owing to the parties’ combined size, the transaction will not raise competition or public interest concerns. In this case, the transaction will salvage a failing firm, thereby securing jobs and enable the business to continue contributing positively to the economy.”
The acquisition deal was first made public in August last year in what marked a turnaround from the initial plan of going into a voluntary liquidation, though details of the buyer remained undisclosed at the time.
Mobius was founded over 14 years ago with a total investment of approximately Sh5 billion. It initially had an ambition of building a Kenyan car brand before switching to assemble the BJ40 model of China’s BAIC Motor Corporation in 2021 under its Mobius brand.
The firm has, however, suffered years of losses and was weighed down by heavy indebtedness though it’s not yet clear the level of dent that Silver Box will be assuming.
It also remains unclear if the deal price will be sufficient to leave something for the shareholders.
KRA in 2018 hit Mobius with a Sh85.74 million based on assessments covering the period between January 2014 and December 2016 relating to capital received from its parent company.
Mobius appealed the demand at the Tax Appeals tribunal but lost the case. The firm had demonstrated its financial vulnerability by producing its financial statements and warned that paying such an amount would lead to its collapse.
The company’s financial statements showed that at the end of August 2020, it had a debt of Sh649.2 million and a shareholders’ deficit of Sh389.1 million.
Mobius ran out of funds in its path to profitability, leading to the initiation of a liquidation process that was thereafter suspended to give room for the buyout.
Its shareholders balked at injecting additional capital and new investors could not be signed up before the liquidation announcement, the company earlier said.
Mobius has an assembly plant at Sameer Africa’s industrial property off Nairobi’s Enterprise Road within the Industrial Area. During its peak, the firm’s sales would amount to about eight units per month.
