TransCentury to Raise Equity via Rights Issue, Use Funds for Expansion

TransCentury PLC (“TC” or” Group”) has reported a 34% revenue growth for the year ended December 31 st , 2019 driven by impressive performance especially in two of its subsidiaries.

TransCentury PLC  will not delist and will instead seek shareholder’s nod for its first rights issue to raise  Ksh 2 billion 

According to the company, its priority is to complete debt restructure and to secure the right funding for the Group to ensure the businesses access funding to capitalise on the opportunities in the lucrative sectors where they operate. 

“The Rights Issue will be on the basis of five (5) new shares for every one (1) ordinary share held and further the directors be authorized to deal with fractions in such manner as they may think fit and to effect all acts and things required to give effect to this resolution subject to the provisions of the Companies Act 2015, the Company’s Articles of Association and the CMA Regulations,” the Infrastructure Company listed on the Nairobi Securities Exchange said in its notice to hold its Annual General Meeting June 2021.

The Group recorded a 34 per cent growth in revenue driven by strong organic growth in the subsidiaries especially; Tanelec Limited and AEA Limited.

Revenues grew by 56.8 per cent in Tanelec and 89.7 per cent in AEA with the performance in both subsidiaries underpinned by a robust order book, successful debt reprofiling freeing up operating cashflows and innovative working capital financing that accelerated execution.

On operating expenses, the Group recorded a 18.5 per cent reduction in line with our strategic plan and driven by increased efficiencies.

TransCentury PLC operates three divisions across 14 countries in East, Central, and Southern Africa. TCL operating divisions include; Power Infrastructure, Infrastructure Projects, and Engineering.

It also revealed that it had made significant progress in debt restructure key to accessing the much-needed working capital. Since 2016 the Group has reduced 40 per cent of commercial debt, increased debt tenure with most tenures falling between 5-10 years and reduced debt service cashflow.

“The progress made in restructuring debt has allowed the businesses in the Group to redirect more of the operating cash to fund the working capital and results can already be seen in the top line,” it said in a statement. 

On the other hand, through increased efficiency and decisive actions to safeguard value by restructuring non-performing businesses, the Group has significantly reduced operating expenses with a 19.5% reduction in 2019 and upto 46% since 2016. However, as a result of the decision to restructure non-performing entities, there was a one- off impairment loss of Kshs 2.8billion related to goodwill carried in one of the scaled-down businesses, without which the Group would have achieved a positive Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA)