Mbaru sells shares in TransCentury valued at Sh108m

Investment banker Jimnah Mbaru has earned Sh107.6 million after selling part of his stake in TransCentury, marking the latest share sale by the company’s founders.

Regulatory filings with the Capital Markets Authority show that Mr Mbaru sold 3.6 million TransCentury shares in the six months to September, valuing the transaction at Sh107.6 million based on the current share price of Sh29.75.

This is the first time Mr Mbaru—the owner of Dyer & Blair Investment Bank— has traded in his TransCentury shares, joining other founders in cutting their stakes.

“I sold the shares to reduce an overdraft (short term bank loan) I had,” Mr Mbaru told the Business Daily in a telephone interview yesterday while confirming the sale.

The share sale has reduced his stake in the investment firm to 4.76 per cent from the 6.24 per cent that he held when TransCentury listed on the Nairobi Securities Exchange (NSE) in July 2011 by introduction.

This has seen him drop to the fifth largest shareholder in TransCentury from position four in a firm whose holding is dominated by wealthy individuals who were close to the former President Mwai Kibaki like Michael Waweru (former KRA chief), Eddy Njoroge (former CEO of KenGen) and businessman Zephaniah Mbugua.

Mr Mbaru has sold the shares at a time when the firm’s stock price has shed 4.03 per cent over the past three months to Sh29.75 and remains below its listing price of Sh50. His remaining 13.04 million shares in TransCentury are worth Sh387.9 million.

This marks his third prominent share dealing over the past year, after the businessman received nearly half a billion shillings from his stake in Britam last year after selling 20 million shares then worth Sh116 million and used the remaining 60.7 million as security for a bank loan when the share averaged Sh5.80.

This year, he sold half a million shares in Uchumi that were worth Sh10 million. Top shareholders of TransCentury including the family of the late James Gachui, Mr Mbugua and Mr Njoroge have reduced the ownership in the firm over the past year.

They have sold more than 6.4 million shares.

The Gachui family sold 1.1 million shares currently worth Sh32.7 million, but it remains the largest investor in TransCentury with shares worth Sh632.2 million.

Mr Njoroge sold three million shares worth Sh89.25 million, while Peter Kanyago sold 957,000 shares (Sh28.4 million) and Joseph Magari traded one million shares (Sh30.1 million).

CMA had barred key shareholders of the investment firm from selling more than half their stakes within two years to August 2013, as part of conditions attached to the listing of the firm in July 2011.

“As a sign of commitment to the growth of the company and confidence in the long-term fundamentals, key shareholders have agreed not to offload 50 per cent of their shareholding for a period of 24 months after the listing,” TransCentury said in its listing information memorandum.

Initially fashioned as an investment club in 1997, the company had raised Sh29 million in seed capital by 2001 which was used to make passive investments at the NSE and buy a minority stake in Castle Brewing Limited, which it exited in 2002 when the brewer’s parent firm SAB Miller pulled out of the local market.

By June, it had assets worth Sh21.7 billion and grew its half-year profit by 16.7 per cent to Sh380.6 million.

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