TransCentury’s Journey from Grace to Grass

In 1997, an idea was born and then came into being among 29 friends with less than 30 million shillings. That idea was TransCentury, an infrastructural-based company comprising of power, transport as well as engineering and by the year 2012 the company was valued to about 21.8 billion shillings.

At its inception, TransCentury capitalized in the buying of stakes in companies. In 1997, the company cast out its net for the first time in Castle Brewery Kenya Limited which had just entered Kenya. By then, Tusker, the giant bear producer had scaled the lands of Kenya for 75 good years which meant that the efforts of Castle Brewery Kenya Limited to dislodge it were like a mosquito trying to dislodge an elephant. The young company, TransCentury’s net caught no fish from Castle Brewery Kenya Limited.

In 2002, TransCentury pulled out of Castle Brewery Kenya Limited and contemplated on the next move. Something to note though was that Mwai Kibaki, then not yet president was a very important member of TransCentury. In 2002, the most popular song was Kibaki Tosha and these ambitious entrepreneurs knew that with one of their own at the helm of power, the road ahead in terms of investments as well as wealth generation was clear. The company, therefore, was well politically connected especially with the coming of Mwai Kibaki to power.

One of the most lucrative business that the company decided to invest in after the collapse of the deal with Castle was the buying of shares at a price of 12 shillings per share from East African Cables. This was a calculated move by TransCentury for the shareholders clearly knew what lay ahead. The government of Mwai Kibaki had put rural electrification on its forefront. The company was sure the tender will be theirs and millions would come out of the project. Since the company was manufacturing electric cables, conductors, transformers and switches, it stood a big chance of handling any infrastructural tender within the government and without.

They always say that a good investor casts his eyes far and wide and TransCentury top brass knew exactly that. The company’s management knew that the best way to invest was to invest and wait and not to wait and invest. To widen its base of operation, the company grew its wings to Arusha Tanzania in a company known as Tanelec (for transformer manufacturing), in Dar es Salaam factory (for copper wires and aluminum), Kewberg Inc. Company in Johannesburg (for specialty cables and in Cableries du Congo, a factory in the Democratic Republic of Congo that dealt in cables. TransCentury had now become an economic giant at the stock market with its price per share in East African Cables increasing ‘from nowhere’ at 12 shillings per share to 614 shillings per share in the year 2004. Where the rain started beating the company is what has puzzled many as now the shares are trading at nine shillings per share.

The boat carrying TransCentury started encountering an economic storm when the company decided to venture into the railway business. The company bought shares in Rift Valley Railways. Mr. Roy Puffet, a South African was running Sheltam Railways that was also part of the Rift Valley Railways. This implies that TransCentury did not buy shares directly from Rift Valley Railways but through Sheltam Railways. This was a mistake. It was a mistake because Mr. Puffet, as it came to be found out, only owned theoretical companies, companies that did not really exist in Kenya but in Mauritius and South Africa. The South African sold his shares to Citadel Capital, an Egyptian company that has now been on the neck of TransCentury with full force.

Rift Valley Railways was now ailing and it needed funds to recover. In total, 15 billion shillings were required to make a complete turnaround. It was clear that TransCentury did not have that kind of money for its stock had just hit 6.8 billion shillings. Was the company going to leave such an investment just to go down the drainage? No way. TransCentury had invested a lot into the company; 668 million shillings at the start, 581 million shillings in the year 2010, 740 million shillings in the years 2012 and another 924 million shillings in the year 2013. This was a lot of money at stake. The company was industrious as well as eager to take risks. The money to wake up RVR was to be found and this was to be made able through floating its shares on the Nairobi Security Exchange and the issuing of an eight billion shilling convertible Eurobond. This was biting more than it could chew.

The Eurobond was secured in the year 2011 and its maturity is in the month of March this year of 2016. The billions have to be paid back but the company has no money. In fact, it has more debts than what it has. This is one of the biggest problem that the company is facing and threatening to come down. In 2011, TrensCentury was valued 13.35 billion shillings according to the NSE records and as today, the company is only valued 2.4 billion shillings. Will TransCentury comeback to its feet? Well, no one knows. Not even those managing it. It all about watching and waiting.

Article by Juma Fred.