Court blocks Transcentury takeover bid
Transcentury Group has obtained a court injunction temporarily stopping Equity Bank Kenya from placing the infrastructure firm under administration, and a chance to pay off a $34.3 million (Sh4.8 billion debt owed to the bank.
The lender had placed Transcentury Group (TC) and its subsidiary East Africa Cables Ltd under administration and receivership respectively, after what appeared to be a disagreement on the modalities of settling the debts. East Africa Cables owe TC Sh1.9 billion.
TC Chairman Shaka Kariuki welcomed the injunction, saying his firm had shown commitment to settling the debt by raising Sh538 million from their shareholders through a rights issue at the beginning of this year despite a challenging economic environment, and were preparing to settle on an agreement favourable to the business and the bank.
Positive discussions
“We are delighted to see that the court has seen the irregularity that marred this very unfortunate and ill-intended process. We viewed the bank as a partner and have been in what we saw as positive discussions to arrive at an amicable agreement just a day before the receiver was appointed by the bank,” he said.
Equity Bank Kenya issued a notice on June 16, 2023, placing TC under receivership. The court injunction takes immediate effect, Kariuki informed shareholders through a press statement yesterday. The injunction is on the basis that the bank illegally appointed a receiver while parties were engaged in negotiations in addition to the brazen breach of procedures set out in the law.
The court process puts a stop to the appointment of the receivers and restrains them or their agents from performing any actions in the capacity of receivers of the company, a move Kariuki said will allow TC to return to focusing on the business operation and achieving their strategy.
At the beginning of this year, Transcentury Group embarked on a Rights Issue transaction to raise funds that would help the firm reduce its debt and unlock working capital.
