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Centum, led by family of late Kenyan tycoon Chris Kirubi, to buy back shares worth $4.8 million

Kirubi passed away in 2021 at the age of 80.

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Kenyan tycoon Chris Kirubi
Chris Kirubi.

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.

East Africa

James Mwangi’s Equity Group to receive $4.1 million for acquisition of Spire Bank

Equity Group is the largest financial services conglomerate in East Africa.

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James Mwangi.

Equity Group Holdings, the Kenyan financial services giant led by James Mwangi, is set to receive millions of dollars from Mwalimu Sacco’s acquisition of financially distressed Spire Bank, as the teachers-backed lender agreed to pay Equity Group Ksh510 million ($4.1 million).

The deal is structured as an asset purchase transaction, backed by the Central Bank of Kenya (CBK), and will see Equity Group assume control over the assets and liabilities of the troubled bank.

The $4.1-million payment by Mwalimu Sacco to Equity represents the difference between the assets and liabilities of Spire Bank, implying that the bank holds zero value and the teachers have lost millions of dollars after purchasing a majority stake in 2014.

Mwalimu Sacco CEO Kenneth Odhiambo said the key consideration was to stop the bleeding and preserve Sacco’s bottomline for its members.

Equity Group will settle all redundancy costs for the more than 100 employees who will lose their jobs following the deal. The bank’s non-performing loans stand at Ksh2.63 billion ($21.1 million), and Equity’s immediate task will be to step up collections and recoveries.

The process of exiting Spire Bank was not as seamless as the initial acquisition, with Mwalimu Sacco citing the bank’s decline as beginning after the withdrawal of Naushad Merali’s deposits worth Ksh1.7 billion ($13.7 million), which represented one-fifth of the bank’s total deposits. 

The takeover of the troubled Spire Bank may present additional challenges and opportunities for Equity Group, which under the leadership of Kenyan businessman, Mwangi reported profits in excess of $280 million in the first nine months of 2022.

As of today, Equity Group shares on the Nairobi Securities Exchange are trading at Ksh44.95 ($0.361) per share, a 0.99 percent decrease from their closing price on Fri., Jan. 27.

This values the company at Ksh170 billion ($1.36 billion) and Mwangi’s 3.38-percent stake at Ksh5.74 billion ($46.1 million).

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East Africa

Meet Mohammed Dewji, Tanzania’s ‘King of Wealth,’ with $1.5-billion net worth

Dewji showcases his philanthropic spirit through his role as the founder and financier of the Mo Dewji Foundation.

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Mohammed Dewji
Mohammed Dewji. ©Billionaires.Africa

With a staggering net worth of $1.5 billion, Mohammed Dewji, the CEO of Mohammed Enterprises Tanzania (MeTL) Group, stands tall as the richest man in Tanzania and one of Africa’s most prominent billionaires.

His prominence in the African business arena is further accentuated by his position as the head of MeTL Group, one of East Africa’s largest industrial conglomerates. The majority of his $1.5-billion fortune is attributed to his stake in the group.

METL Group, a highly successful conglomerate established by its founder’s father in the 1970s, has an impressive reach across a wide range of industries, including trading, agriculture, manufacturing, energy and petroleum, financial services, mobile telephony, infrastructure, real estate, transport, logistics, and distribution.

The highly diversified company has established itself as Tanzania’s largest domestically-grown corporation, with a presence in 11 African nations, including Uganda, Ethiopia, Kenya, Rwanda, Burundi, Zambia, Mozambique, Malawi, the Democratic Republic of the Congo, and Tanzania.

Beyond his business ventures, Mohammed Dewji also showcases his philanthropic spirit through his role as the founder and financier of the Mo Dewji Foundation, a charitable organization dedicated to providing scholarships for underprivileged children in Tanzania.

With a view to tackling the growing food security challenges faced by Sub-Saharan Africa, Mohammed Dewji announced his intentions to go public with an agriculture company in either New York or London in 2023.

He declared that the ambitious $4-billion initiative will receive robust support from top-notch development banks and will be executed via a blank check agreement, delivering a much-anticipated uplift to the agriculture industry.

The proposed investment comes at a pivotal time in the world, as food prices continue to soar due to disruptions in the global supply chain network. This has resulted in a significant hike in the cost of staple commodities, including grains, edible oils, and fertilizers. 

Dewji added that the $4-billion blank check arrangement, which will result in the launch of an agricultural venture, is a fantastic way to bring food security to Africa’s heels because it will capitalize on the continent’s potential to feed itself and the world.

He explained that the agricultural company, which may diversify into soybean and sugar plantations, could provide investors with a five- to ten-fold return over a decade, but it would necessitate “patient, impactful, long-term capital.”

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East Africa

Kenyan banker James Mwangi’s Equity Group receives approval to acquire Spire Bank

Mwangi owns 3.38 percent of the financial services group.

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James Mwangi.

Equity Group Holdings, a reputable financial services group led by Kenyan businessman James Mwangi, is set to acquire the financially distressed Spire Bank on Jan. 31, cementing its position as East Africa’s leading financial services group.

Following approval from both the National Treasury and the shareholders of both banks, the recent development marks the completion of a long-awaited merger.

“Pursuant to section 9 (1) of the Banking Act, the Cabinet Secretary for the National Treasury and Planning has granted approval for the acquisition of select assets and liabilities of Spire Bank Limited by Equity Group, led by James Mwangi,” Central Bank of Kenya Governor Patrick Njoroge stated in a gazette notice.

The new deal, modeled after the successful partnership between SBM and Chase Bank in August 2018, is set to be implemented on Jan. 31 and will result in the end of Mwalimu Sacco’s ownership of the bank, which they acquired for more than Ksh2.7 billion ($21.7 million) in 2014 from late Kenyan tycoon Naushad Merali.

The process of exiting the bank has not been as seamless as the initial acquisition, with Mwalimu Sacco citing the bank’s decline as beginning after the withdrawal of Naushad Merali’s deposits worth Ksh1.7 billion ($13.7 million), which represented a fifth of the bank’s total deposits.

Spire Bank’s financials for the first quarter of 2022 showed a loss of Ksh188 million ($1.51 million), bringing the total accumulated losses to Ksh9.7 billion ($77.9 million). In addition, the bank was in default on all CBK capital and liquidity ratios.

Despite a challenging macroeconomic environment that has increased the cost of living for East African teachers and other workers, Spire Bank has pursued a turnaround based on lower costs, loan recoveries, and the conversion of shareholder deposits into equity.

Equity Group, which has the financial and managerial strength to put Spire Bank back on track and pull it out of its recent financial difficulties, will get a good deal by accepting teachers’ deposits, as well as Ksh1.3 billion ($10.8 million) in liabilities and nearly Ksh900 million ($7.48 million) in assets linked to Spire Bank.

The acquisition may present additional challenges and opportunities for Equity Group, which reported profits in excess of $280 million in the first nine months of 2022 under the leadership of Kenyan multimillionaire businessman James Mwangi.

Mwangi, who has been instrumental in the growth and transformation of Kenya’s financial services industry, owns a sizable 3.38-percent stake in Equity Group.

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