Centum Investment Company Plc plans to become a debt-free holding company by March next year through the repayment of a total Sh2.2 billion worth of loans in the current financial year.
The firm has gradually reduced its borrowings in recent years in a strategy it says is aimed at eliminating risks linked to indebtedness in an environment of rising interest rates and weakening shilling.
“Fully repay the balance of debt,” Centum’s chief executive James Mworia wrote in the company’s latest annual report giving guidance on top corporate priorities in the current financial year.
The company says its subsidiaries, joint ventures and associates will continue to carry debt based on their capacity. The strategy seeks to control the risk of borrowings at each operating unit.
The company’s subsidiaries include Centum Re which is a real estate developer and uses debt in its operations.
“At the portfolio company level, borrowings are aligned to the respective company’s debt capacity. The borrowings of each company are secured by their respective assets and cash flows,” Centum said.
The firm repaid borrowings amounting to Sh2 billion in the year ended March 2023, dropping from Sh4.2 billion a year earlier.
“The company made a further debt repayment of Sh250 million and consolidated the balance of the debt into a Kenya shillings denominated facility to eliminate foreign currency exposure,” Centum said.
It relied heavily on debt in the early years of expansion over a decade ago when it started its move away from listed shares and into private equity and infrastructure projects.
