The court has come to the rescue of TransCentury PLC, an investment holding company with a focus on infrastructure after the company was put under receivership by Equity Bank over a Ksh 4.8 billion debt. The court has given a ruling to halt the receivership plan by Equity after the former filed a claim of breach of the law as they were still engaged in negotiations when Equity illegally appointed receivers.
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Equity Bank settled for receivers after TransCentury PLC missed a Kshs 2.0 billion cash call target for the second time by the end of April. The infrastructure company has an accumulated debt of Ksh 9.0 billion owed to lenders, including Equity Bank. In an attempt to pay off its debts, TransCentury had eyed a Ksh 2.0 billion cash target from the rights issue, which only achieved Ksh 538.0 million.
The infrastructure company then negotiated a down payment of Ksh 108.0 million to equity in addition to a debt discount request of over Ksh 280.0 million coupled with a new restructuring of the debt, which Equity Bank reviewed as unacceptable and initiated a plan for receivership by June 16, 2023.
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The lender proceeded to appoint Mr Muriu Thoithi and Mr George Weru of Price Waterhouse Coppers as the joint receivers of both TransCentury PLC and its subsidiary company, East Africa Cables Limited, effective June 16, 2023, with powers extending to all assets and general undertakings of the company, where only the receivers and their representatives had the power to handle assets of the company. The receivership was to close in 24 months with the court tussles.
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In recent years, the infrastructure company has banked on financing activities like asset sales and rights issues rather than operations for cash flow and working capital boosts. The infrastructure company stated that through a planned Ksh 1.1 billion property sale and Ksh 5.2 billion loan renegotiations, it will increase its cash flow position and aid in settling some of its debts.
