WPP Scangroup plans to write off Ksh.4.7 billion investment
WPP Scangroup intends to write off up to Sh4.7 billion investments in its subsidiaries.
The firm has thus transferred the amount from its share premium account to its merger reserve account from which it can absorb the impairments without hurting its earnings.
It can, however, be transferred to the merger reserve which a company is allowed to create after fulfilling certain conditions in the Companies Act, 2015.
According to Business Daily, Scangroup has been reviewing its investments including interests in multiple subsidiaries in Kenya and other African markets, bracing itself for potential writeoff of part of their values.
This has seen the share premium account, representing the value of shares acquired by shareholders above their nominal price drop to Ksh.4.4 billion in the review period from Ksh.9.1 billion in 2020.
WPP ScanGroup Plc made a net loss of Ksh.37.9 million at the close of the financial year ended December 31, 2021, from a net loss of Ksh.1.7 billion in 2020.
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