Investment firm TransCentury sold its 10.7 percent stake in the State-owned Development Bank of Kenya (DBK) before it was put under receivership last month, recent disclosures by the bank indicate.
TransCentury sold the stake, which it valued at Sh180 million in its latest annual report, to Star Discover Life Investment, Danmill Enterprises and Suods Logistics Limited.
Star Discover Life Investment bought the largest portion -- 4.5 percent or 2,343,890 shares. Star Discover Life Investment is owned by Star Discover Life Insurance whose shareholding is layered by other companies.
Suods Logistics, listed as owned by Christopher Maina Muororo, has a 4.0 percent shareholding while construction firm Danmill Enterprises has 2.2 percent.
Danmill Enterprises also has a sole director, Peter Kamau Mwangi.
DBK disclosed the change of ownership on its website without specifying the date the transaction was concluded. Attempts to contact the bank’s management were unsuccessful.
TransCentury was put under receivership by Equity Bank Kenya on June 20 after it defaulted on a Sh2.8 billion loan. Equity had issued a demand notice for the debt in June 2023, and later moved to place TransCentury under receivership but the High Court threw the investment firm a lifeline by giving it a two-year relief window.
Equity seized TransCentury last month following expiry of the two-year window and appointed Muniu Thoithi as the receiver.
Mr Muniu said they were still in the process of compiling the assets held by TransCentury and had not been involved in the sale.
“We just took over so we could not have done the transaction,” said Mr Muniu.
TransCentury bought into DBK in 2006 and is expected to have booked huge capital gains from the sale after holding onto the unquoted stock for close to 20 years.
The sale of the shares is also expected to have offered the investment firm much needed cash as it underwent a turbulent financial period.
TransCentury’s financial woes came to a sticky end last month when Equity seized its assets and those of its subsidiary East African Cables. The subsidiary owed the bank Sh1.94 billion, bringing Equity’s claim on the two related institutions to Sh4.74 billion. Equity put the parent, TransCentury, into receivership while placing East African Cables under administration.
Subsequently, trading of TransCentury and East African Cables shares at the Nairobi Securities Exchange was frozen by the Capital Markets Authority effective June 23.
TransCentury’s chief executive, Ng’ang’a Njiinu, resigned from the company the same day the receivers moved in, ending his tenure at the company where he had been employed for 17 years with the last eight at the helm.
The government holds a majority stake of 89.3 percent in DBK through the Industrial and Commercial Development Corporation (ICDC). Last year the government approved plans to sell its stake to private investors. Implementation of the sale would give the new entrants a head start if they opt to increase their shareholding.
DBK posted a net profit of Sh18.8 million in the first quarter of the year ended March 2025, being a 16.1 percent growth compared to a similar period last year. Its 2024 full-year profit was Sh81.6 million.
DBK had an asset base of Sh21.7 billion as at the end of March 2025, including a loan book of Sh11.2 billion.
The bank’s core capital is Sh2 billion, which is lower than the new minimum requirement of Sh3 billion that takes effect at the end of December 2025. The lender has disclosed plans of a rights issue to make it compliant with the new capital requirement.
A rights issue would open the window for the new investors to increase their stake if the government does not inject enough capital to protect its stake.
DBK is compliant with other capital requirements set by the Central Bank of Kenya and has generally been profitable in the past five years, underlining its attractiveness to investors.
