Connect with us

Hi, what are you looking for?


Centum raises Sh3.2b in private bond

NAIROBI, Kenya, Sep 25 – Listed investment firm Centum has successfully raised Sh3.2 billion in a five year debt from the issuance of senior unsecured fixed rate notes and senior unsecured equity linked notes through private placement.

The fixed rate notes come at a fixed interest rate of 13.5 percent per annum, while the equity linked notes are at a fixed rate of 12.75 percent per annum both payable semi-annually.

Centum CEO James Mworia said that the equity linked notes will enjoy an upside linked to the growth of the Company’s Net Asset Value subject to a maximum of 15 percent of the par value of the notes.

“This successful issue is a mark of confidence by investors in Centum and we extend our gratitude to all the investors who participated as well as the transaction team”, he said.

The fixed rate notes constituted 57 percent, while the equity linked notes were 43 percent of the notes raised.

Centum’s decision to raise debt was advised by the need to fund a pipeline of attractive investment opportunities, which are in excess of its cash holdings.

Mworia revealed that the money raised from the issue will be applied towards conclusion of attractive investments developed in the Private Equity and Real Estate business lines.

“The recent decline in interest rates has created a suitable environment for the issuance of debt instruments at reasonable cost,” Mworia added.

Centum’s debt-to-asset ratio prior to the issue stood at seven percent and has increased to 24 percent post issue.

The company has a strong cash generative investment portfolio coupled with a zero dividend policy, which implies significant debt service ability.

Advertisement. Scroll to continue reading.

“The five year debt tenure matches the investment horizon of planned investments. Further, the capital is at a fixed cost, which is a critical element in making long term investment decisions,” he explained.

“These factors will boost return on shareholder capital and consequently amplify the rate of growth of net asset value per share, which is a conservative measure of shareholder wealth,” he noted.

Centum’s net asset value per share increased by 132 percent between April 2009 and March 2012 to Sh20.6 per share without any significant external capital raising.

Centum’s bond issue is the largest private placement in the history of Kenya’s Capital Markets and is the fourth largest after Kengen and Safaricom in 2009, and more recently the Housing Finance in 2010.

The transaction team was led by NIC Capital as the arrangers and Coulson Harney as the legal advisors.

PriceWaterhouseCoopers were the reporting accountants, NIC Bank the receiving bank, and Ropat Trust Company the Note Trustee.

Centum is in the process of seeking regulatory approvals to allow for the listing and trading of the notes on the Nairobi Securities Exchange.

The country’s largest listed investment firm has a portfolio of over $190 million (Sh16.15 billion) invested across asset classes, from blue chips on the Kenyan bourse to prime residential land in the capital Nairobi to unlisted firms.

Advertisement. Scroll to continue reading.
Click to comment

More on Capital Business

Executive Lifestyle

NAIROBI, Kenya, Mar 12 – The country’s super wealthy individuals are increasing their holding of bonds, gold and cash, a new report by Knight...

Ask Kirubi

NAIROBI, Kenya, Mar 9 – Businessman and industrialist Dr. Chris Kirubi has urged members of the public to exercise extreme caution when making any...

Ask Kirubi

NAIROBI, Kenya, Mar 24 – Businessman and industrialist Dr. Chris Kirubi is set to own half of Centum Investment Company PLC, following a go-ahead...

Ask Kirubi

It is without a doubt that the COVID-19 pandemic has caught the whole world by surprise. Although its full impact is yet to be...


NAIROBI, Kenya, Jun17 – Kenya’s tea leaves manufacturer Kericho Gold, has been awarded the Superbrands Seal by Superbrands East Africa for their quality variety...


NAIROBI, Kenya, Mar 18 – Commercial Banks have been ordered to provide relief to borrowers on their personal loans, with loans eligible from March...


NAIROBI, Kenya, Apr 13 – As the local telecommunications industry gears up to roll out 5G networks in the country, the Communications Authority of...


NAIROBI, Kenya, Mar 22 – Airtel Kenya is offering free internet access for students in order to enable continued learning at home in the...