Centum Investment Plc, an East African-focused investment firm controlled by the family of late Kenyan tycoon Chris Kirubi, has announced plans to repay its dollar-denominated loans to reduce its finance costs, as the Kenya shilling’s depreciation continues to put pressure on its earnings.
James Mworia, Centum’s CEO, disclosed the repayment plans for the dollar-denominated loans earlier this week, revealing that the loans will be repaid from a combination of transaction proceeds and cash generated from ongoing business operations, as the investment firm embarks on strategies to boost earnings while reducing its forex risk exposure.
The loans due for repayment include Ksh1.22 billion ($10 million) in borrowings held by the publicly traded firm and the dollar component of a Ksh5.5-billion ($45 million) credit facility taken up by its real estate unit Centum Re in 2020, according to figures contained in its recently published financial statements.
Centum Re’s facility, which has an outstanding balance of Ksh3 billion ($24.4 million), included a $9 million (Ksh1.1 billion) payment and a Kenya shilling equivalent of $36 million priced at Central Bank Rate plus four percent per annum.
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 businessman and serial investor who passed away last year 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.
Centum has yet to turn a profit since the passing of Kirubi, owing to a double whammy of declining income and rising finance costs, despite efforts to restructure its balance sheets and reduce interest-paying debt in its capital structure.
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.
