TransCentury gets Sh2 billion from Strategic Investor

Investment firm TransCentury has secured Sh2.02 billion in fresh capital to recapitalize the business.

The equity injection from US based Kuramo Capital Management comes at a time the investment firm is structuring a financing plan to offset an Sh8 billion bond that comes to maturity on the 25^th of March.

In a statement to shareholders, the board assured that it continues to implement a fund raising programme with other investors expected to come on board to write off the debt.

“This investment by the strategic investor will complement other funding options to settle the outstanding convertible bond and fund infrastructure projects,” a statement by the board reads.

The Sh8 billion convertible bond was issued in 2011 before TransCentury went public, by its subsidiary TransCentury Mauritius.

TransCentury remains optimistic it will beat the deadline.

Bondholders had this week laid out a list of demands among them targeting Sh4 billion from the investment firm in cash and conversion of the outstanding amount into equity.

TransCentury has been opposed to a change in the shareholding structure but with time running out will be hard pressed to raise the remaining Sh6 billion.

Top shareholders at TransCentury include Chairman Zeph Mbugua (4.7%), former KRA boss Michael Waweru (7.57%) and Peter Kanyago (5.59%)

Last week the Capital Markets Authority had raised its concerns that TransCentury faced liquidity constrains affecting its ability to pay off the debt.

“Due to this refusal there is perceived threat of a default by TCL as the bond is due for redemption on March 25 especially given that the market capitalization of the company has decreased,” CMA Ag CEO Paul Muthaura said in an opinion piece last week.

TransCentury is currently valued at Sh1.7 billion with net assets in the region of Sh3.6 billion, far below the outstanding bond principal amount.