Investment firm TransCentury #ticker:TCL has rolled over by one year Sh369.5 million worth of short-term loans it had taken from its controlling shareholder Kuramo Capital, buying the cash-strapped company more time to clean its books.
The Nairobi Securities Exchange-listed firm was due to repay three loans to the private equity firm between July and next month but the maturity of the debt has been extended as part of an ongoing balance sheet restructuring.
“The shareholder loan was restructured and tenor extended by one year as part of the ongoing restructure programme,” TransCentury’s chief executive Ng'ang'a Njiinu told the Business Daily.
He added that the company had also extended the life of its other debt to four years, while financing has been secured for its subsidiaries in Kenya and Tanzania.
“Other restructure discussions are ongoing and we continue to receive great support from key stakeholders as we execute on our plan,” said Mr Njiinu. The Kuramo loans were secured by shares in TransCentury’s subsidiaries East African Cables #ticker:CABL and Tanelec Limited.
This means that failure to settle the loans will result in the PE firm acquiring stakes in the subsidiaries, adding to its 25 per cent equity in their parent company. A $1.8 million (Sh191 million) loan was issued in February last year at an interest rate of six per cent and is due in December 2018.
The loan is secured by a charge of 56.7 million ordinary shares of East African Cables, TransCentury disclosed in its latest annual report. A $1.2 million (Sh127.5 million) loan was issued in June last year at an interest rate of five per cent and was payable in July 2018. It is secured by a similar number of shares in East African Cables.
A $500,000 (Sh51 million) loan was issued in October last year at an interest rate of five per cent and matures in December 2018.
The loan is secured by a charge of 100,067 ordinary shares of Tanelec Limited.