The firm which received an earlier nod from the markets regulator in May this year will offer the same five additional shares for every existing share held by each shareholder.
TransCentury is expected to issue and list an additional 1.9 million shares valued at Ksh.1.10 each.
The investment firm had not complied with the requirements for a rights issue earlier this year prompting it to seek CMA’s approval for a second time.
“The Authority’s approval of the rights issue was contingent on TransCentury Plc meeting several conditions among them, the publication of financial statements for the year ended December 2020 as well as making available for inspection, by shareholders, management accounts for the year ended December 31, 2021," noted CMA Chief Executive Officer Wycliffe Shamiah.
"We are satisfied that the disclosures made in the issuer’s information memorandum comply with the requirements of Regulation 11 of the Capital Markets Securities, Public Offers, Listing and Disclosures Regulations, and contain information that will enable investors to make an informed decision on the rights issue.”
Proceeds from the rights issue are expected to be applied to settling debts owed to creditors including lenders while unlocking working capital for the group.
Additionally, TransCentury is expected to apply part of the proceeds to undertake audits of its financial statements by December 31, 2021, and publish the disclosures.
In its annual report, TransCentury stated it was engaging its lender on a debt settlement plan which would involve partial payment of the debt from proceeds of the rights issue process at the company level to unlock the requisite working capital facilities for its subsidiaries.
TransCentury further intended to restructure the debt balance to long tenures to match expected outflows.
The firm has additionally been looking to sell its non-operating assets to improve its financial standing and ease liquidity risks.
TransCentury was technically insolvent at the end of 2020 with current liabilities outstripping current assets by Ksh.10.6 billion in the period.
In the same period, TransCentury has overdue payments (default) of Ksh.2.7 billion including a facility of a similar amount owed to Equity Bank Kenya Limited.
Of its combined Ksh.24.6 billion total financial liabilities, Ksh.14.2 billion of the arrears was due on demand at the end of 2020.
TransCentury had initially proposed to raise Ksh.4.9 billion ($40 million) from the rights issue.
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