US based Carlyle Group says it paid all TRA taxes upon exiting Export

27Feb 2017
The Guardian Reporter
The Guardian
US based Carlyle Group says it paid all TRA taxes upon exiting Export

US based Carlyle Group which has refused to disclose the amount paid to buy a stake in local commodities firm, Export Trading Group in 2012 and while selling the same in 2015, said it paid all applicable taxes.

In an emailed response last week, London based official of the company, Catherine Armstrong said they did not disclose the sums involved because of restrictions by United States Securities Exchange Commission (SEC).

“Carlyle’s Sub-Saharan Africa Fund paid all applicable taxes after we sold out stake in ETG,” said Armstrong but declined to give an exact amount paid to Tanzania Revenue Authority from the share sale.

“On background, I can tell you that the value of the investment had nowhere near doubled by 2015. We are prohibited by SEC regulations from divulging the exact exit valuation, in common with all the deals we do, but any reports which suggest we haven’t paid the due taxes are completely false and unsubstantiated,” she noted.

The Carlyle Group spokesperson further noted that the US$ 210 million investment made in 2012 was for a consortium involving three parties and not the value of the business or the value invested by Carlyle.

“Additionally, you will recall that the global commodities market was very challenging in 2015, and this hit the profitability of ETG. We therefore looked to exit our investment, as we felt the performance of the company and sector wasn’t as secure as we would have originally hoped,” Armstrong stressed.

ETG’s spokesperson, Landi Coetzer however declined to say on the subject. “No comments from our side,” Coetzer wrote in an electronic response recently.

Alongside Carlyle, the Pembani Remgro Infrastructure Fund, a South African private equity fund, Standard Chartered and ETG's management also contributed to the $210 million cash injection. Standard Chartered invested $74m in the company according to a statement.

ETG is a commodities company with over 30 processing plants and 300 warehouses across 30 Africa countries, employing a workforce of more than 7,000 people, the statement added.

“The deal, which has now closed, represents the first exit for Carlyle’s sub-Saharan Africa Fund. Financial terms of the transaction were not disclosed,” a statement released soon after Carlyle sold its stake in 2015, said.

Carlyle’s purchase of a minority stake in ETG gave the local company an enterprise value of more than $1bn, according to analysts at the purchase time.