May 26, 2022

Mawazo Writing Africa

Writing about the main

Centum’s Two Rivers subsidiary to sell stake by April

CentumsubsidiaryTwo Rivers Development Limited (TRDL) will sell a stake by April to raise new capital and reduce debt.

James Mworia, CEO of Centum, said the company has entered into discussions with several investors who are interested in acquiring an interest in the subsidiary.

The company is still finalizing the structure of the transaction, which could take the form of an outright sale of shares or a convertible instrument, depending on the valuation agreed with the investors.< /p>

Centum’s stake may or may not be diluted depending on how the transaction is structured.

However, he refused to specify the amount of the stake Centum intends to sell and the amount to disclose they hope for an increase, although he previously said the proceeds would help pay off some of the debt held by TRDL.

“There is investor interest in TRDL because dev Company’s rights to be fully serviced with infrastructure and infrastructure. We were able to validate three different development models, from high-end, middle-income and affordable housing,” said Mr. Mworia.

“We are working with multiple investors and will hopefully close soon. The target stake after closing will depend on the valuation we agree on and the structure, which can be received as either pure equity or a convertible facility. We should have a signed agreement within the next three or four months.”

Centum currently owns 58 percent of TRDL, AVIC International owns 39 percent and Kenya Development Corporation owns three percent.

TRDL, in turn, owns a 50 percent stake in Two Rivers Lifestyle Centre, which owns the mall and office tower, with Old Mutual Properties owning the other half. As a result, Centum has an effective 29 percent interest in the mall and tower complex.

The success of the proposed share sale will therefore dilute Centum’s ownership of both the mall and the surrounding residential and land developments.

Last month, Centum also said TRLC would convert a Ksh 4.5 billion ($39.6 million) loan into a security that an undisclosed lender would use to earn dividends and a stake in the shopping complex would receive if owners decide to sell to reduce interest costs.

The debt was part of a $96 million secured during construction of the shopping and office complex. The sale of a portion of its ownership in TRDL is one of several transactions Centum has planned to raise cash and monetize a portion of its assets.