De La Rue plc (LSE: DLAR) ("De La Rue", the "Group" or the "Company") provides an update on recent developments related to structure and legacy issues in Kenya and India.
De La Rue today provides the following update on the Company’s activities in Kenya, that are now conducted through a joint venture with the Government of Kenya, in which the Government of Kenya holds a 40% equity share.
Owing to current global market demand, and no expectation of new banknote orders from the Central Bank of Kenya for at least the next 12 months, De La Rue Kenya has suspended banknote printing operations in the country. De La Rue continues to operate with three banknote sites in the UK, Malta and Sri Lanka. This is a reduction from five sites operating in 2020 and further serves to adjust the capacity to current market demand, while retaining the capability to scale up operations when market demand recovers. The expansion of our factory in Malta, which will increase capacity in both Currency and Authentication, remains unaffected by this decision and continues as previously planned.
Importantly, the joint venture between De La Rue and the Government of Kenya remains active, and the Company continues to explore further business opportunities, both in Kenya and for export from Kenya, with a view to restarting production if the economic climate permits.
The suspension of activities at De La Rue Kenya does not affect the previous guidance provided related to current year financial performance.
In addition, on 13 January 2023, the High Court in Nairobi, Kenya dismissed an appeal from a De La Rue subsidiary in Kenya related to a historical tax issue, equating to approximately £7.2m at today’s exchange rate. De La Rue is disappointed with the ruling and its Kenya subsidiary is preparing an appeal to the Court of Appeal.
De La Rue has been made aware that the Central Bureau of Investigation in India (CBI-I) has launched an investigation into the conduct of Arvind Mayaram, the former Indian Finance Secretary, in which the historical activities of De La Rue in India prior to 2016 have been implicated. The Company has not received any official direct communication of this investigation from the CBI-I, but has learned about it from publicly-available sources.
De La Rue has not served the Government of India or the Central Bank of India in any capacity since 2016. The Company believes that there is no merit to the allegations that relate to De La Rue and is seeking legal advice in this regard.
De La Rue plc's LEI code is 213800DH741LZWIJXP78.
De La Rue plc
+44 (0) 7990 337707
Clive Vacher, Chief Executive Officer
Rob Harding, Chief Financial Officer
Louise Rich, Head of Investor Relations
+44 (0)207 404 5959