Bankrupt Mobius Motors Kenya says it will soon be fully acquired after signing a deal with an unnamed buyer, with the transaction expected to keep the car brand alive.
The startup, which 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, had earlier announced it was going into a voluntary liquidation.
A meeting of Mobius’ creditors that was set for yesterday has been postponed indefinitely after the motor vehicle assembler and dealer agreed to the buyout the previous day.
“On August 14, 2024, Mobius Motors accepted a bid for the acquisition of 100 percent of its shares by an undisclosed buyer. Both parties are looking to close the transaction within 30 days,” the company said in a notice.
The identity of the buyer could not be established by the time of going to press but sources said a second-generation, well-connected Kenyan businessman has been keen on snapping up the company.
Mobius officials declined to comment on this story. The company earlier said it had explored deals with financial investors and rival dealers.
Mobius had suffered years of losses and was heavily indebted but it is not yet clear the level of debt the buyer will be assuming in the transaction.
It also remains to be seen whether the deal price will be large enough to leave something for the shareholders.
Buying Mobius in the current circumstances has presented the buyer with an opportunity to pay a bargain price than it would under rosier conditions.
Mobius has an assembly plant at Sameer Africa’s industrial property off Nairobi’s Enterprise Road in the Industrial Area. At the peak, the company’s sales would amount to about eight units per month.
The buyer will be looking at the potential to grow Mobius’ product range in the sports utility vehicle (SUV) market as well as using the company’s assembly facility for producing other models. Acquiring Mobius can also open the door for an expanded distributorship agreement with BAIC Motor Corporation. The Mobius III, a more refined SUV compared to its predecessors, is a locally-branded version of the Chinese multinational’s BAIC BJ40 model.
The Mobius III was retailing for $43,000 (Sh5.5 million), promising to offer stiff competition against imported and locally assembled SUVs.
Most new SUVs sold in Kenya including Land Rover Defender and Toyota Land Cruiser Prado are retailing at more than Sh6 million.
It was not immediately clear how many Mobius cars have been sold since inception as the company does not report its sales like other new vehicle dealers.
Demand came exclusively from individuals and private firms. Mobius did not benefit from government orders which are critical for supporting the formal dealers, accounting for more than a quarter of annual sales.
Mobius’ distressed sale comes at a time when rival dealers are keen to expand their franchises in a market where having multiple brands is seen as key in driving sales.
Mobius ran out of funds in its path to profitability, leading to the liquidation that has been suspended as the buyout progresses. Its shareholders balked at injecting additional capital and new investors could not be signed up before the liquidation announcement, the company said earlier.
Founded in 2011 by British entrepreneur Joel Jackson, the company attracted key backers including Playfair Capital, Chandaria Industries and DFC, a US government development corporation.
The investors had helped the startup raise about $56 million (Sh7.2 billion) in funding over five rounds which proved inadequate to sustain its operations, leaving its showroom empty.
The launch of Mobius III in 2021 came after earlier prototypes failed to gain traction.
The company entered the market with Mobius I in 2011 as the first vehicle to be built by local welders and mechanics. It would soon follow up with Mobius II in 2015, pushing to leave a mark in a market saturated with cheaper, second-hand imports from Asian countries.
Critics said the two earlier models were too basic, lacking the refinement and features that established automakers offer their clients.
The time it took to partner with BAIC Motor Corporation amounted to a lost decade, with the Covid-19 pandemic also contributing to disrupting the company’s business plan.
