An aerial view of Masinga Hydroelectric Power Station, Kenya. Tanzania
has turned to the AfDB to finance two of its major infrastructure
projects — the 2,100 MW Stiegler’s Gorge hydroelectric plant and the
modernisation of Dodoma Airport. FILE PHOTO | NATION
Regional investment firm TransCentury Ltd is in talks with
shareholders for a possible injection of fresh capital to turn around
the loss-making business weighed down by huge debts and poor
performance of its subsidiaries.
performance of its subsidiaries.
The EastAfrican has
learnt that the firm, which is listed on the Nairobi Securities Exchange
is yet to come out of the woods despite bringing on an anchor
shareholder and restructuring its bondholder debt in 2016.
“The
firm wants to return to profitability and is engaging the anchor
shareholder and minority shareholders to come up with a way to
restructure the business.
“They are looking at all
options including the possibility of injecting new capital into the
business and to further restructure the debts they have,” an insider
privy to the firm’s recovery plans told The EastAfrican.
When
contacted, the firm’s management said they are reviewing the funding
options of the firm, which would be communicated as per the regulatory
guidelines.
“The company continues to review its
capital needs and funding options and any decision to raise additional
capital would be communicated to the public as per the requirements of
the regulatory authorities,” said Phyllis Gachau, the firm’s head of
communications.
Falling numbers
TransCentury’s
stock on the Nairobi Securities Exchange (NSE) has fallen to as low as
Ksh4.55 ($0.04) per share compared with its listing price of Ksh50
($0.5) per share in 2011, wiping out almost all of the shareholders’
wealth.
In February this year a Kenyan court granted
the firm’s former chief executive Gachao Kiuna a Ksh14 million
($140,000) payoff after suing the firm for his terminal benefits.
Dr
Kiuna resigned from the firm in January 2016 following boardroom
disagreements over the firm’s recapitalisation and repayment of an $80
million debt owed to bondholders.
He immediately sued the firm over unpaid terminal benefits amounting to Ksh21 million ($210,000).
Profit warning
TransCentury
has already issued a profit warning that its full year financial
performance for 2017 will be more than 25 per cent lower than that of
2016 and has also sought approval from the Capital Markets Authority
(CMA) to delay announcing its results until mid June.
During
the six months to June 30, 2017 the firm recorded a loss of Ksh1
billion ($10 million) compared with a loss of Ksh1.31 billion ($31.1
million) in the same period in 2016; while revenues declined by 28 per
cent to Ksh2.99 billion ($29.9 million) from Ksh4.13 billion ($41.3
million) in the same period.
Its short term liabilities
(current liabilities) stood at Ksh12.35 billion ($123.5 million)
compared with current assets of Ksh5.17 billion ($51.7 million) implying
the firm is facing difficulties meeting its short term obligations and
financing the day-to-day operations of the business.
In 2016, the firm made a loss of Ksh863.89 million ($8.63 million) down from a loss of Ksh2.42 billion ($24.2 million) in 2015.
According
to the firm’s chairman Shaka Kariuki, the uncertainties related to the
firm’s resolution of the bondholder debt that was maturing in March 2016
led to a reactionary credit freeze to some of the businesses and
inevitably worsening its working capital position and group-wide debt
burden.
TransCentury has operations in Kenya, Uganda,
Tanzania, Rwanda, Zambia, Mauritius, Democratic Republic of Congo and
South Africa.
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