The joint receivers of TransCentury Plc are set to raise Sh2.2 billion through the disposal of stakes in two subsidiaries — Tanelec Limited and Avery East Africa Limited — recovering nearly half of the Sh4.8 billion loan owed to Equity Bank Kenya.
TransCentury was placed under receivership by Equity Bank a year ago after defaulting on the loan in 2023.
The receiver managers said they had signed a share purchase agreement with Tanzanian firm Msufini Limited, a manufacturer of chlorine and sodium hydroxide, for the acquisition of TransCentury’s 70 percent stake in Tanelec Limited.
TransCentury’s 137,347 shares in Tanelec, which manufactures power transformers, electrical switchgear and metering units, are being sold for Sh2.1 billion ($16.35 million).
Its 94.4 percent stake in Avery East Africa (AEA), a company specialising in infrastructure, weighing equipment and energy solutions, is set to be sold to SPAC Hill Capital Limited for Sh111.1 million.
The two transactions will generate total cash proceeds of Sh2.2 billion.
“The total consideration for the Tanelec transaction is $16.35 million (Sh2.1 billion) and completion remains subject to satisfaction or waiver of agreed conditions precedent,” said the joint receivers, George Weru and Muniu Thoithi of PricewaterhouseCoopers.
“Subject to completion of the transactions, the receivers will apply the realisations, together with proceeds from other transactions, towards the settlement of TransCentury’s obligations in accordance with applicable insolvency laws and creditor priorities,” they added.
The sale will mark the second acquisition by Msufini from the distressed TransCentury after the Tanzanian company acquired East African Cables Tanzania about two years ago in a deal estimated at Sh115 million.
Msufini is associated with Tanzanian businessman Justin Lambert, who serves on its board alongside Janet and Judith Lambert.
Business value
Tanelec was valued at Sh2.25 billion by TransCentury at the end of 2023. The investment firm acquired its 70 percent stake in 2007 for Sh78.7 million and subsequently expanded the business.
By the end of 2023, Tanelec had recorded revenue of Sh3.1 billion and a profit before tax of Sh42 million.
The company’s main operations are in Tanzania, although it also owns a subsidiary in Zambia, operates a servicing workshop in Uganda and has a manufacturing plant in Kenya.
Avery East Africa (AEA), which operates in Kenya, Uganda, Tanzania and Rwanda, was valued at Sh319 million in 2023. The agreed purchase price of Sh111.1 million means SPAC Hill Capital is paying about one-third of the valuation assigned by TransCentury.
TransCentury acquired its 94.4 percent stake in AEA in 2005 for Sh49.8 million.
The receivers advertised AEA for sale last year, saying they were seeking investors willing to recapitalise the business, citing a substantial project pipeline and rising demand across its core sectors.
They did not disclose whether SPAC Hill Capital has experience in the infrastructure sector or plans to support the company’s operations after the acquisition.
Other deals
Equity Bank Kenya also placed another TransCentury subsidiary, East African Cables Plc (EAC Kenya), under administration over a separate Sh2.2 billion debt.
Cable Experts Limited has offered to acquire TransCentury’s 68.37 percent stake in East African Cables in a transaction that is awaiting regulatory approval.
The cable manufacturer says it intends to revive East African Cables and repay the debt owed to Equity Bank Kenya.
