Cables manufacturer, East African Cables, is currently engaged in an undisclosed deal that could result in a significant change for the company. The company is a leading producer of data cables, electrical transmission lines, domestic conductors, and aluminium cables. It has manufacturing plants in Kenya, Tanzania, and DR Congo as well as operations in Ethiopia, Uganda, Rwanda, Burundi, and South Sudan. EA Cables is partly owned by the struggling investment firm TransCentury Plc.
In 2017, EA Cables parent company -TransCentury – signed two loan deals with New York-based PE firm Kuramo Capital worth $3.1 million (~KSh320 million) in which TC offered 113.4 million shares in East African Cables as collateral for the loans. The loans’ fell due in July and December 2018. However, according to a statement by TransCentury’s CEO Ng’ang’a Njiinu to the Business Daily, the repayment dates were pushed forward by one year to July and December 2019.
“The shareholder loan was restructured, and tenor extended by one year as part of the ongoing restructure programme,” said Mr. Ng’ang’a Njiinu.
Therefore, a significant change in East African Cables is expected to significantly alter Transcentury’s debt profile given that 113.4 million shares of the cable’s manufacturer (44.8 percent of the company) are held as collateral for the listed Investment firm.
East African Cables and TransCentury jointly issued a cautionary statement on 26th April urging investors to exercise prudence when trading securities of the two public companies. The entities said that a formal and detailed announcement on the East African Cables’ transaction would be made public when the time is right.
