Clarity Needed on De-listing of TransCentury Plc Shares – Genghis Capital

TransCentury PLC  has received its shareholder's approval to increase the share capital of the Company from KSh 600 Million into one billion two hundred million (1,200,000,000) ordinary shares of KSh 0.50 each.

Genghis Capital, an investment and stock brokerage firm advises TransCentury Plc shareholders to seek more clarity before it delists from the Nairobi Securities Exchange.

According to Genghis, the Infrastructure Company since its listing by introduction 9 years ago ‘has been a disappointment to investors (listing price Ksh 50, latest pre-announcement price Ksh 1.61) despite its industrial-heavy portfolio of investments in Power, Infrastructure Projects and Engineering across 14 countries in East, Central and Southern Africa.”

In a notice, last week, TransCenturytold its shareholders it was seeking to delist from the NSE in order to meet precondition for accessing new capital from private equity funds.

“We do not recommend investors to jump in on this announcement until there is more clarity on how the de-listing will be structured,” said the analysts from their Genghis Cross Asset Weekly Strategy July 13, 2020.

Genghis observes that the company which operates in 14 countries in East, Central, and Southern Africa has been releasing financial results ‘critically late’ with the FY19 to December 2019 yet to be released highlighting challenges of operating as a publicly listed company.

It has been argued that the listing price was high but the underlying business has been under heavy losses since 2014 amidst shrinking of sales. 

As a result, “The proposal to de-list the company, meaning current shareholders will be locked in an unlisted company (losing liquidity of trading the shares), the undesirable outcomes for public market investors. However, the EGM could give more clarity on the structure of the delisting, keen of which will be a buy-out of minority shareholders.”

The firm has scheduled to hold an Extraordinary General Meeting 30 July 2020 to deliberate on the matter.