NSE billionaires up Centum stake by Sh430 million

Billionaire investors Chris Kirubi, Baloobhai Patel and John Kibunga Kimani have raised their stakes in investment firm Centum, acquiring 6.6 million shares worth Sh430 million in nine months to November.

The latest regulatory filings by Centum show that the three firmed their grip on the company at a time when insurance group UAP Holdings cut its ownership in Centum by selling 2.9 million shares valued at about Sh187.5 million.

Mr Kirubi bought the most shares, about four million, valuing his additional stake at an estimated Sh259.6 million based on Centum’s current share price of Sh64.5.

This saw his total interest in the investment firm rise to 25.2 per cent in November, up from 24.6 per cent in February last year.

Mr Kirubi’s shareholding would have gone up significantly if it were not for the share sale by UAP Holdings, through which he owns part of his Centum portfolio.

The businessman has a 9.58 per cent stake in UAP, meaning that the insurer’s reduced stake in Centum also indirectly cut back his overall stake.

Mr Kirubi in September 2013 announced his intention to raise his ownership in Centum to 30 per cent, with his recent share purchase marking his biggest move toward that goal.

The businessman has previously attributed his delayed purchase to the rally in Centum’s share price that was initially driven by the same announcement.

READ: Centum share hits 5-year high on Kirubi offer

The rising stock price has significantly raised the potential cost of buying the additional stake. When he first announced the intended share purchase, his cost was Sh832 million based on Centum’s trading price of Sh25.5 at the time.

The stock has however more than doubled to trade at Sh64.5, raising the current potential cost to Sh2.1 billion. Mr Kirubi said the recent share purchase is part of the re-organisation of his ownership in the investment firm.

Investment vehicle Kiruma International, which is controlled by Mr Kirubi, transferred 25.1 million Centum shares worth Sh1.6 billion to the businessman’s personal account in the same period.

“The share transfer is meant to consolidate my ownership in Centum,” Mr Kirubi said. The businessman’s stake in the investment firm now stands at Sh10.8 billion and is held directly and through his interests in Kiruma, International House Ltd and UAP.

The businessman says his share purchase is a reflection of his confidence in Centum’s long-term prospects and is also meant to help ensure that local investors retain majority ownership in the investment firm.

Fellow billionaire investor, Baloobhai Patel, bought 2.2 million shares of Centum worth Sh144.4 million.

This pushed Mr Patel’s stake to 0.82 per cent, making him the fourth largest local individual shareholder in the investment firm and further boosting his overall NSE portfolio of over Sh3 billion.

Mr Kimani, the third largest local individual investor in Centum, raised his stake to 0.88 per cent after buying 404,700 shares valued at Sh26.1 million.

The investor has built up a stock portfolio of over Sh2 billion, taking major positions in blue-chips like Safaricom, East African Breweries Limited and Total Kenya.

The high-net-worth individuals have been attracted by Centum’s increased profitability which has been driven by re-investment of all earnings in acquisitions, new projects and ongoing operations in subsidiaries or associates.

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The company’s net profit rose 37.8 per cent in the half year ended September to Sh1.2 billion compared to Sh892 million a year earlier.

This came as investment income rose 58.3 per cent to Sh1.8 billion. Its share price has gained 89 per cent in the past 12 months, offering a profit-taking opportunity to investors who don’t have the option of receiving a dividend.