Centum Investments Company is considering re-investing proceeds of the sale of its shares in Sidian Bank in Treasury bonds in an attempt to recover losses incurred on the transaction and improve cash flow.
Last week, the firm, which is listed on the Nairobi Securities Exchange (NSE), announced it has sold 83.4 percent of its shares in Sidian Bank to a Nigerian lender –Access Bank Plc – in a transaction valued at Ksh4.3 billion ($37.06 million).
The deal could be viewed in two aspects. On one hand, Centum gained considering that the market value of the third-tier lender had fallen to as low as Ksh2.7 billion ($23.27 million) by September 2021.
But the proceeds from the share sale compare unfavourably to the initial investment of Ksh4.7 billion ($40.51 million) translating to a loss of Ksh400 million ($3.44 million)
“We never made a gain against the original investment. So for us it has been an issue of value recovery.
“The option we had was to stay on board and put in more capital or exit and get back our capital and redeploy it,” the group’s chief executive James Mworia told The EastAfrican in an interview last week.