The company was due to pay the bondholders on March 25 or convert the debt into equity but did not have the cash. The shareholders on the other hand refused to have their stakes diluted leading to CMA warning of default/FILE
NAIROBI, Kenya, Sept 15 – TransCentury Limited (TCL) Board of Directors has approved a capital injection of Sh2billion by investment firm Kuramo Africa Opportunity Kenyan Vehicle Limited to help deal with its financial challenges.
Kuramo Africa Opportunity Kenyan Vehicle is a private company incorporated in Mauritius and is a special purpose vehicle managed by US Based Kuramo Capital Management focused on high net worth investment management services globally.
“The Board of Directors of TransCentury Limited has approved the investment of $20 million into the TCL Group by way of subscription for shares in the company and in its wholly owned subsidiary, TC Mauritius Holdings (TCM),” TransCentury said in a notice on Thursday.
The listed infrastructure company said the Sh2 billion injection by Kuramo will see the latter receive a 24.99 percent stake in TransCentury equivalent to 93.7million new ordinary shares.
However, the acquisition is subject to regulatory approvals by the Capital Markets Authority and the TransCentury shareholders during the Extraordinary General Meeting slated for Friday, September 16.
After approvals, the Nairobi Security Exchange (NSE) will then be requested to admit the new ordinary shares of TCL to listing on the official list of the Alternative Investment Market Segment.
The main purpose of the funds is to finance the payment of bondholders of the Sh8.1 billion Eurobond issued by the company in 2011.
“The investment will be used to partly refinance the TCM senior unsecured convertible bond,” the company said.
The company was due to pay the bondholders on March 25 or convert the debt into equity but did not have the cash. The shareholders on the other hand refused to have their stakes diluted leading to CMA warning of default.
However, Kuramo Capital came in and announced plan to inject the Sh2billion and salvaged the situation.
The company has a tough time calming the bond holders especially after the resignation of two senior officials in January this year including the CEO Gachao Kiuna and a non-executive director, Joe Karago.
Despite the challenges, TCL posted Sh1.19 billion a first half pre-tax profit up from a loss of Sh646.34m over the same period in 2015.
