TransCentury has received a nod to raise Ksh.4.6 billion through shareholders’ Rights Issue as part of its turnaround strategy.
In a regulatory approval by the Capital Markets Authority (CMA), the Nairobi Security Exchange (NSE) company will raise the monies on the basis of five new ordinary shares for every one existing share.
It plans to issue two billion new ordinary shares in addition to the already issued 1.2 billion ordinary shares.
The Rights Issues are for a turnaround plan for the cash-strapped firm and will go a long way to reduce debt and unlock capital for its businesses.
TransCentury recently launched a new strategic plan 2022-2025, with its chief executive Nganga Njiinu saying that he is “confident that the initiatives they have laid out that include refocusing on its core business.”
A Rights Issue is an offer given by a company to existing shareholders to buy a proportional number of additional shares at a given price, within a fixed period.
Rights are often transferable and a shareholder may sell them on the open market.
TransCentury has not issued its profit results for three years now. It last narrowed its losses in 2019 by 12.9 percent to report a pre-tax loss of Ksh.3.185 billion down from Ksh.3.658 billion the previous year.
The revenue growth was credited to two of its subsidiaries, Tanelec Limited and Avery East Africa (AEA) Limited, which reported a 56.8 percent and 89.7 percent revenue growth respectively.
Tanelec, headquartered in Arusha, Tanzania, deals in the manufacturing and distribution of transformers in the region while AEA, headquartered in Nairobi, Kenya, provides solutions that enhance infrastructure efficiency and sustainability across the region.
Since 2016, Transcentury has reduced 40 percent of commercial debt, increased debt tenure with most tenures falling between 5 to 10 years and reduced debt service cash flow.
Transcentury’s subsidiaries include East African Cables, Civicon Ltd, AEA Ltd., Tanelec Ltd. and Kewberg cables and braids (based in South Africa).
