Troubled investment firm TransCentury has been given a lifeline after the capital markets regulator allowed it to release its full year results for 2019 by December 30, 2020.
The Capital Markets Authority (CMA) also extended the release of results for the six months period ended June 30, 2020.
Bugged by cash deficiencies, the firm has been unable to release its financial results. It also delayed an Extraordinary General Meeting (EGM) set for end of July 2020, with more information on fundraising now set to be tabled during the Annual General Meeting (AGM).
During the AGM, the firm will table, among others, fundraising and necessary resolutions along that line, and delisting from Nairobi Securities Exchange (NSE) for shareholder negotiation and approval.
The firm is now focusing on fundraising and is negotiating a transaction that will boost its liquidity as it seeks long-term growth and profitability.
In a statement released on Saturday, TransCentury said it had negotiated with, and received an approval from the CMA to file and publish its results by year end, giving it much needed breathing space.
Started in 1997 and growing to boast three operating divisions across 14 markets in East, Central and Southern Africa, TransCentury hit the headlines in 2016 when it almost defaulted on a Sh8 billion in bond repayments.
It was rescued by American private equity firm Kuramo Capital, with a capital injection of $20 million (Sh2 billion) for a 25 per cent stake.
This was a debt-equity swap with lenders as the Sh8 billion five-year convertible bond was maturing with little wiggle room to honour the debt, forcing the firm into the inevitable.
The company sold an undisclosed stake to Kuramo Capital Management LLC, leading to a boardroom shakeup that saw the ouster of its founding directors.
And after years of trading at the NSE, TransCentury will now delist as it seeks new strategies to reverse dwindling fortunes.
“The recommendation is in line with the ongoing strategic initiatives anchored on delivery of commercial opportunities, debt profiling, fundraising and accelerating execution of emerging opportunities,” said the firm.
The delisting comes on the back of falling revenues that have eroded the firm’s capital base over the years, wiping out billions of shareholder value.
TransCentury floated 375 million shares in 2011 at the introductory price of Sh50 per share, putting the company’s valuation at Sh18.7 billion. Fortunes have since dipped in the recent years.
The firm says the move to delist has also been pushed by depressed liquidity in the capital markets, prompting the search for other capital venues.
“While we have seen liquidity reduce in the capital markets across the region, we have also seen an increase in funding that is available for private or non-listed businesses, especially in the sectors that we focus on and have received interest from potential financiers who would provide capital that is structured in line with our strategic plan,” said TransCentury Group Chief Executive Nganga Njiinu.
The company has been working on a strategy to turn around the business in the last three years, with focus on delivery of a robust and fundable orderbook, debt reprofiling to match cashflows, fundraising and order book execution.
It has managed to reduce their commercial bank debt by 40 per cent and reprofiled 90 per cent of group wide debt. “Our focus now is on the fundraising pillar and the group is in negotiations towards a transaction that will bring in the much needed liquidity,” the firm said.