Nairobi Securities Exchange listed Investment firm TransCentury has proposed the issuance and allotment of 93.78Million new ordinary shares to Kuramo Africa. This is approximately 25% of total share capital of the company.
In addition to the above, the listed firm will also to allocate 70,120 preference shares to Kuramo Capital all these in exchange of a $20 million (Sh2 billion) into the company. Transcentury says the Sh2 billion will be used to repay part of its debt that was reduced to Sh4 billion after negotiations with bondholders.
In a notice sent to market participants, TransCentury did not disclose the terms of the preference shares which usually have a higher priority in claiming of the company’s assets and earnings than ordinary shares.
Their contract generally requires that they are paid a fixed rate of dividend first – amounting to a form of interest – before any dividends are paid on ordinary shares.
The entry of Kuramo is part of TransCentury’s efforts to pay the billion dollar-denominated bond it issued in 2011 and which had grown to over Sh8 billion by its maturity date of March 25 this year on accrued interest and weakening of the shilling.
Cash from Kuramo is to pay half the amount while the remaining portion, due this month, could be restructured into a new three-year loan.
A section of the bondholders were also allotted 5.7 million shares in TransCentury, booking a 95 per cent loss in the convoluted settlement plan.
The firm’s share price rout is part of the reasons the bondholders could not convert their units into shares.
(Kenyan wallstreet, Business Daily, TransCentury)