TransCentury restructures Ksh. 1.6 billion subsidiary debt

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PHOTO/COURTESY: TransCentury

Investment firm TransCentury has restructured a Ksh. 1.6 billion debt owed to investors by its cable manufacturer subsidiary EA Cables in an effort to lessen the cable producer’s heavy debt burden that has affected its operations in the country.

While making the announcement, the two companies did not disclose specific details of the transactions and as such, it remains to be seen whether TranCentury will acquire more shares in EA Cables or whether it will entirely forgive the Ksh. 1.6 billion debt that its subsidiary has accrued over the years.

“The transaction that has a material impact on the capital structure of the company has resulted in reduction of debt by Sh1.65 billion representing 44 percent of the total debt,” the two firms said in a joint statement.

The debt restructuring has also extended EA Cables’ remaining debt tenure to 10 years with a two-year moratorium on principal repayment and six months on interest payments put in place. Over 80 percent reduction of debt service cash requirement is also expected in the next two years.

To that effect, TransCentury has insisted that the debt restructuring process will help EA Cables realize the pent up value in the firm’s contracted order book.

“This will allow the business to realise the pent-up value in the current contracted order book that is in excess of Sh5.2 billion and effectively service the even bigger non contracted retail market order book, where East African Cables is a household name,” the joint statement from the two companies read.

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