, NAIROBI, Kenya, May 11 – Listed firm Centum Investment is set to offload part of its 22 percent shareholding in Carbacid Investment to raise capital for other portfolios.
Centum Investment Chief Executive Officer James Mworia said on Wednesday that the decision to divest is mainly driven by a need to raise funds to invest in other opportunities that have the promise of better returns.
He, however, maintained that the move was strategic adding that Carbacid has strong business fundamentals underpinned by an expected expansion of the beverage sector and the strong economic growth in the region.
“We have now developed an attractive pipeline of opportunities across Sub-Saharan Africa and it is important that we rank the return potential of our existing investments against that of potential investments,” Mr Mworia said.
Centum acquired the 22 percent equity block in Carbacid for Sh418 million in May 2009. Over the two years, it has held this investment it has generated Sh1.2 billion in dividends and disposal proceeds.
He added that this exit showed that there was sufficient liquidity and depth in the local capital markets and that there existed opportunities to generate market-beating returns not only in Kenya but also in most of Sub-Saharan Africa.
Centum has invested in a number of stocks at the Nairobi Stock Exchange, which form the bulk of its portfolio, including Safaricom, British American Tobacco, Kenya Airways, Barclays Bank, East African Breweries and CMC Motors.
It holds stakes in private companies like NAS Airport Services, UAP Insurance, K-Rep Bank General Motors, AON Minet Insurers, and Nairobi Bottlers, among others, which makes up Sh5.5 billion in private equity for Centum.
In the real estate industry, the company has acquired 100 acres of land in Kenya and another 300 acres in Uganda which it plans to zone for residential and commercial use.
Centum, which is cross listed on the Uganda Securities Exchange seeks to provide investors with access to a portfolio of inaccessible, quality and diversified investments in the firm’s quoted private equity, real estate and infrastructure business lines.
Mr Mworia said Centum had made a holding period return of 190 percent and this was illustrative of the sort of investments the company is making and demonstrates Centum’s capacity to gain value for its investors.
The company has maintained strong financial results over the years raising its asset base from Sh6.5 billion to Sh10.3 billion with its market capitalisation rising to Sh13.9 billion. Centum is looking to grow the assets under its management to Sh30 billion by 2014.
Follow the author at https://twitter.com/MjKaranja