The shareholders of infrastructure investment firm TransCentury are expected to hold a meeting on March 16 to vote on the proposal to convert loans from top investor Kuramo Capital into equity as part of the rights issue.
The vote at the upcoming extraordinary general meeting (EGM) comes on the backdrop of the firm’s rights issue that failed to raise the target of Sh2 billion worth of new capital, warranting a second extension.
Kuramo which extended Sh1.9 billion shareholder loans to the NSE-listed investment firm has proposed to convert the facilities into equity as part of its rights issue subscription.
Despite not specifying a share of conversion for the shareholder loan, the switch is expected to see Kuramo raise its stake in the company significantly.
A full conversion of the shareholder loan would, for instance, raise Kuramo’s stake in TransCentury to 83.7 percent from the current 25 percent stake.
While the deal does not represent new capital injection, the board of TransCentury says it will serve to reduce the company’s debt exposure in line with the objectives of the rights issue.
“The special business is to consider the conversion of shareholder loans into ordinary shares in the reopened rights issue in order to further reduce debt as per objectives of the rights,” reads part of the EGM notice.
