Centum Kenya to Fund-Raise, Exit Investments as Profit Falls

NAIROBI (Capital Markets in Africa) – Centum Investment Co., Kenya’s second-largest publicly traded investment group, plans to raise funds by selling assets and will target third-party funding for projects, after it reported a plunge in full-year profit.

The Nairobi-based company will reduce its stakes in investments that aren’t providing “good returns” and part of the proceeds will be used to help repay outstanding debt of 11.4 billion shillings ($113 million), Chief Executive Officer James Mworia said at a briefing in the city on Wednesday.

“We have a robust exit pipeline that we’ve been working on for a while,” Mworia said. “We are going to conclude some sizable exits and also reduce some shareholding in some of our companies where we are not yet generating cash.”

Centum earlier reported net income in the 12 months through March slumped 66 percent to 2.79 billion shillings as investment and other income dropped to 5.71 billion shillings from 8.38 billion shillings a year earlier. It attributed the decline to the effects of lower property-valuation gains and the deferral of realized gains on the sale of GenAfrica Asset Managers Ltd., which is expected to be completed in the first half of the company’s financial year.

Centum expects to generate 4.1 billion shillings of income this year from the sale of plots of land at the mixed-use Vipingo project, which is as big as 10,254 acres, Mworia said. The sale of homes that have already been built at the project is expected to raise a further 3 billion shillings, he said.

The company has already received 2 billion shillings of third-party equity funding to build 196 apartments at its Two Rivers project in Nairobi, Mworia said. Ground breaking for the next phase of the 100-acre-real estate project is scheduled for next year and sale of the units is expected to raise as much as $54 million, he said.

Source: Bloomberg Business News