East African Cables has announced that it will be exiting the Tanzanian market through the sale of its 51 per cent stake in East African Cables Tanzania Limited.

This move signals a strategic shift for the company as it grapples with recent financial difficulties.

Msufini Tanzania Limited, a Tanzanian manufacturer of chlorine and sodium hydroxide, has entered into a share purchase agreement with East African Cables.

The deal involves the acquisition of 16.2 million ordinary shares, representing a controlling stake in the Tanzanian subsidiary.

The purchase price remains undisclosed, but East African Cables previously valued its investment in the unit at Sh115 million at the end of 2022.

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"The sale is subject to conditions that are customary to transactions of this nature, including receipt of shareholder and regulatory approval," stated East African Cables in a press release issued on Wednesday.

The statement further said that once the completion of the sale is complete, EAC Tanzania will no longer be a subsidiary of the company,

This divestiture is expected to provide much-needed capital for East African Cables.

In June 2023, the company, along with its parent firm TransCentury, faced financial hardship and was placed under administration because of a Sh4.8 billion debt burden.

The proceeds from the sale are likely earmarked to bolster the company's financial health and navigate its path forward.

East African Cables had originally acquired the majority stake in its Tanzanian subsidiary in October 2005.

The decision to exit the market comes after nearly two decades of operation and reflects a strategic shift for the company as it prioritizes financial stability.