Centum Investment Plc, an East African-focused investment firm controlled by the family of late Kenyan tycoon Chris Kirubi, is set to spend Ksh600.5 million ($4.84 million) to buy back 10 percent of its listed shares.
The move which is part of the next phase of the company’s expansion ambitions and is set to be reviewed by the directors and shareholders at an extraordinary general meeting on Feb. 3, comes more than a month after Centum announced plans to repay its dollar-denominated loans in an effort to reduce its finance costs as the Kenya shilling’s depreciation continues to put pressure on its earnings.
The buyback program, which is set to open on February 6th and continue for 18 months until Aug. 8, 2024, is open to all shareholders regardless of the size of their shareholding, but subject to the maximum buyback size.
The company is looking to re-acquire 66.5 million shares at a price of Ksh9.03 ($0.0728) on an open market basis with the buyback price representing the volume-weighted average price of the company’s shares in the 30 days preceding the share buyback’s board approval.
The program would also help the company to adjust its market price to better reflect the fair value of the company’s ordinary shares.
However, the board of the company has reserved the right to terminate the buyback on certain conditions, including when the program is no longer deemed to be in the best interest of the company and shareholders, changes in economic and market conditions, and the incidence of a material change in the firm’s financial position.
Centum Investment is Kenya’s largest publicly traded investment firm. The East African-focused firm invests in real estate and private equity assets in the consumer goods, financial, agribusiness, and power sectors.
Kirubi, a leading Kenyan tycoon and serial investor who passed away in 2021 at the age of 80, had a significant 31-percent stake in the investment firm, which is now held by his son Robert Kirubi and daughter Mary-Ann Musangi, who received 80 percent of his fortune, which included stakes in Centum, KCB Group, Haco Industries, Bendor Estate Limited, and other businesses.
Despite efforts to restructure its balance sheets and reduce interest-paying debt in its capital structure, Centum has yet to turn a profit since the passing of the leading Kenyan tycoon, owing to a double whammy of declining income and rising finance costs.
At the end of the first half of its 2023 fiscal year, Centum saw its net loss increase to Ksh1.55 billion ($12.6 million) from Ksh243.6 million ($2 million) a year earlier, primarily due to unrealized foreign exchange losses.
