TransCentury top owners cut stake after 2011 IPO

 From left: Joseph Magari sold 1,041,225 shares, Eddy Njoroge sold 3 million shares, Zeph Mbugua sold 325,582 shares and Anne Gichuhi sold 1 million shares. Photos/FILE
From left: Joseph Magari sold 1,041,225 shares, Eddy Njoroge sold 3 million shares, Zeph Mbugua sold 325,582 shares and Anne Gichuhi sold 1 million shares. Photos/FILE  Nation Media Group

The founders of TransCentury have sold more than five million shares worth nearly Sh130 million, marking the first stock sale since the investment firm listed at the Nairobi Securities Exchange in July 2011.

Filings with the Capital Markets Authority (CMA) show that Eddy Njoroge, KenGen’s outgoing managing director, sold three million shares in a move that cut his stake in the firm to 4.54 per cent at the end of November, from 5.63 per cent in December 2011.

Anne Gachui — the widow of businessman James Gachui — sold one million shares, cutting the family’s stake to 7.79 per cent in November, from 8.16 per cent in December 2011.

The family, however, remains the largest investor in TransCentury with shares worth Sh501.7 million.

Former Treasury permanent secretary Joseph Magari sold 1,041,225 shares while the chairman of East African Cables, businessman Zeph Mbugua, sold 325,582 shares. But the two maintained their position among TransCentury’s top 10 shareholders.

The transactions occurred in a period when the investments firm’s share price averaged about Sh24.1 a piece, meaning that Mr Njoroge pocketed an estimated Sh72.3 million, Mr Magari earned Sh25 million, Mrs Gachui Sh24.1 million and Mr Mbugua earned Sh7.65 million.

The regulator 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.

Its other key shareholders include Michael Waweru, the former commissioner General of Kenya Revenue Authority, Jimnah Mbaru (chairman of Dyer and Blair) and businessman Peter Kanyago, all known to be close associates of President Kibaki.

“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.

The share sale of the top shareholders has cut the stake controlled by the top 10 investors to 55.3 per cent in November from 57.3 per cent in December.

TransCentury’s share price has more than halved since its debut at the NSE to Sh23.50 compared to the listing offer price of Sh50.

The stock has shed 13.7 per cent in the past one year, making it the worst performing counter among its peers in the investment segment at the NSE.

Olympia Capital’s share price gained 6.25 per cent last year to Sh3.40 while Centum Investment lost 8.52 per cent to Sh12.4 in the year that saw the benchmark market index gain 28.95 per cent.

City Trust was the best performer on the counter after gaining 39.2 per cent to Sh390, helped by news of its planned merged with I&M Bank.

TransCentury’s half- year net profit rose five-fold to Sh326 million in June compared to Sh54 million the year before, as sales jumped 56 per cent to Sh7 billion from Sh4.5 billion.

The company was founded in 1997 by a group of Kenyan entrepreneurs, including its former chairman James Gachui who passed on in December 2010.

Initially fashioned as an investment club, 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.