TransCentury beats retreat on delisting plan

Investments firm TransCentury Ltd #ticker:TCL (TCL) has made a U-turn on earlier plans to delist from the Nairobi Securities Exchange (NSE) where it is planning a rights issue.

The company's group chief executive Nganga Njiinu said Monday in interview the loss-making company will seek shareholders' nod to issue 2 billion new shares at five shares for every two at a meeting to be held next month, (June 10).

He did not say immediately how the cash call has been priced per share. Its shares traded at Sh1.13 as at Friday.

"As you may recall, delisting was to allow us to tap into much needed funding, however, subsequent to the postponement we have had shareholders expressing interest in participating in a fundraising process to support TC turnaround," said Mr Njiinu in emailed responses to Business Daily.

"We shall therefore focus on the Rights Issue which is a process that provides all shareholders an opportunity to participate," he said.

TransCentury said earlier it needed to exit the NSE to access new capital from private equity funds that will only invest in it as a non-listed business.

If successful, the move would have closed the chapter on Transcentury’s nine-year life as a publicly traded firm during which it has lost Sh12.6 billion or 95 percent of its market value.

TCL loss widened to Sh3.93 billion in 2019 compared to a net profit of Sh468.26 million in 2010 prior to its listing on the NSE by way of introduction.

By delisting it would have joined eight other firms that have gone private in recent years, mostly through takeovers, including oil marketer KenolKobil and motor vehicle dealer CMC Holdings.