Tuesday, February 05, 2008

TC listing

Transcentury aka G29 are finally coming to the market! Many will recall that they had tried to do a private placement in November 2007 which they then pulled (lets put it this way, it would have been hard for any investor to commit Ksh335m to an entity that was aligned to one of the presidential candidates in a too close to call general election). The good thing is that as with all IPOs, they'll have to let it all hang out as it were. So we can put down some of the myths about who owns TC-i.e. the 40% that is not widely known and what do they own. There is also the myth about how highly leveraged they are-having seen their books up to 2006, I can confirm that they had one long-term loan of Ksh350m (accounting for around 10% of its balance sheet) and reserves of around 800mn.
Meanwhile, there are now Equity-esque type rumors that EA Cables, in which 75% of TC's investment is in, is facing a liquidity crunch. Cables invested Ksh1bn to build its new factory and HQ in Industrial Area and apparently it’s the financing for this that has led to the liquidity crunch. I might be wrong, but the facts don't stuck up.
Why would you be looking to list when your largest investment which happens to be publicly listed stock is in financial trouble? Bottom-line: Should they as its suggested list before June, this would be a shot in the arm for our bruised NSE. TC's returns in the last two or so years have been phenomeno.


bankelele said...

The attraction of invsting in TC would be the unlisted portion - wananchi, independent power generation etc. And I find it hard to believe that EACables is in trouble or that it is impacting TC so drasticaly

MainaT said...

Banks, yes and they ability they seem to have of being able to any country and buy high-growth assets without attracting political heat. From the placement document, the majority of their intended investments are actually outside Kenya.
Re EA Cables-that is why I called the rumours Equity-esque.