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22nd of July 2018

Economy



TransCentury marks EA Cables shares for Sh366m insider loan

Companies Wednesday, July 4, 2018 20:41

By VICTOR JUMA

TransCentury's chief executive, Ng'ang'a TransCentury's chief executive, Ng'ang'a Njiinu. FILE PHOTO | NMG 

NSE-listed infrastructure company TransCentury #ticker:TCL has pledged a 30.9 per cent stake in its subsidiary East African Cables #ticker:CABL as security for a Sh366.5 million loan it took from its controlling shareholder Kuramo Capital.

The firm disclosed details of the shareholder loan in its latest annual report which shows the debt is secured by a total of 113.4 million shares of the cables manufacturer which have a current market value of about Sh408 million.

TransCentury also pledged 100,067 shares in its Tanzanian unit Tanelec Limited as part of the transaction.

Kuramo, which has a 25 per cent stake in TransCentury, made three short term loans to the listed company through its wholly owned subsidiary TC Mauritius Holdings Limited.

A $1.8 million (Sh187.3 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 56,703,563 ordinary shares of Sh0.50 each in the capital of East African Cables, a subsidiary of TransCentury Plc,” the company said in the report.

A $1.2 million (Sh125 million) loan was issued in June last year at an interest rate of five per cent and is payable this month. It is secured by a similar number of shares in the cables manufacturer.

A $500,000 (Sh50 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 Tanzanian Shillings ten thousand (TZS 10,000) each in the capital of Tanelec Limited, a subsidiary of TransCentury PLC,” the company said.

Should the debt be satisfied by issuing the total of 113.4 million shares of EA Cables to Kuramo, the PE firm will end up with a 30.9 per cent stake in the subsidiary.

If repaid in cash, the dollar-denominated loans will cost TransCentury a total of nearly Sh20 million based on current exchange rates.

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