TransCentury to cede 25% stake to Kuramo Capital

Listed investment firm TransCentury has curved out a 25 percent stake of the company to be sold private equity firm Kuramo Capital as part of efforts to refinance the company.

Kuramo will be investing Sh2 billion into TransCentury in return for 93.7 million shares, which equates to a quarter of the firm’s shareholding.

The move is set to dilute the stake held by the major shareholders as, Kuramo takes on the role of strategic investor in turning around TransCentry.

Among the top shareholders include Anne Gachui, former Kenya Revenue Authority commissioner general Michael Waweru and TransCentury chairman Zephaniah Mbugua.

TransCentury is set to hold an extraordinary general meeting on Friday, seeking shareholder approval for the deal.

“The acquisition is subject to certain conditions precedent including the receipt of regulatory approvals from the Capital Markets Authority, relevant completion authorities and approval by shareholders,” TransCentury said in a notice to shareholders.

TransCentury brought the U.S based private equity firm as part of a cash raising exercise to repay a Sh8 billion dollar denominated bond taken in 2011.

The investment firm ran into financing challenges by the bond’s maturity date in March, seeking strategic partners to pay of the bond.

Kuramo injected the Sh2 billion and has been working on a refinancing plan to settle the bondholders. Bondholders agreed to convert part of their debt into equity in the firm.

After years of loss making, TransCentury bounced back to profitability with a half year profit of Sh1.3 billion.

This has seen the firm’s share on the Nairobi Securities Exchange (NSE) gain, trading at Sh12.20.