Cen­tum cuts bond­hold­ers Sh4.3bn cheque

Firm re­tires Sh3bn fa­cil­ity that ma­tures in De­cem­ber and takes Sh5bn bond

Business Daily (Kenya) - - CORPORATE NEWS -

Vic­tor Juma

Cen­tum In­vest­ment is set to cut a Sh4.3 bil­lion cheque to re­pay a cor­po­rate bond, which ma­tures on Mon­day.

The Nairobi Se­cu­ri­ties Ex­change-listed firm yes­ter­day said in­vestors will also get a 15 per cent premium on the par value of the bond, equiv­a­lent to Sh191 mil­lion

The com­pany, in a state­ment yes­ter­day said it has also re­tired a Sh3 bil­lion loan from Rand Mer­chant Bank (RMB), which was to ma­ture in De­cem­ber, and taken a fresh Sh5 bil­lion four-year fa­cil­ity from the same lender.

“The net im­pact of these move­ments is that Cen­tum has re­paid in full the Sh7.2 bil­lion of ma­tur­ing debt that was fall­ing due in 2017. Long term debt (has) de­creased from Sh13 bil­lion as at March 31 to Sh11 bil­lion, com­pris­ing the Sh6 bil­lion bond ma­tur­ing in 2020 and the Sh5 bil­lion fa­cil­ity from RMB,” said Group CEO James Mwo­ria.

Cen­tum raised Sh4.2 bil­lion through two five-year bonds in Septem­ber 2012. One bond, which net­ted Sh2.9 bil­lion, earned in­ter­est at a fixed rate of 13.5 per cent.

The sec­ond, tech­ni­cally known as eq­uity-linked debt, earns in­ter­est at a fixed rate of 12.75 per cent and had an op­tion of ac­cru­ing an

The irm said it closed the year ended March with a cash po­si­tion of Sh4.6 bil­lion JAMES MWO­RIA


ad­di­tional max­i­mum re­turn of 15 per cent of the prin­ci­pal on ma­tu­rity.

The firm said it closed the year ended March with a cash po­si­tion of Sh4.6 bil­lion, backed by short­term credit fa­cil­i­ties that in­creased avail­able liq­uid­ity to Sh6 bil­lion.

The 15 per cent premium on the cor­po­rate bond was con­di­tional on the growth of Cen­tum’s net as­set value, a re­quire­ment that was met in the year ended March 2014 when the book value per share rose to Sh34.47, sur­pass­ing the Sh30 thresh­old.

The ex­cess re­turn to eq­uity-linked bond­hold­ers, at Sh187.5 mil­lion, raised the to­tal amounts payable to the two classes of bond­hold­ers to Sh4.3 bil­lion as of March.

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