Centum Investment is set to cut a Sh4.3 billion cheque to repay a corporate bond, which matures on Monday.
The Nairobi Securities Exchange-listed firm on Thursday said investors will also get a 15 per cent premium on the par value of the bond, equivalent to Sh191 million.
The company, in a statement said it has also retired a Sh3 billion loan from Rand Merchant Bank (RMB), which was to mature in December, and taken a fresh Sh5 billion four-year facility from the same lender.
“The net impact of these movements is that Centum has repaid in full the Sh7.2 billion of maturing debt that was falling due in 2017. Long term debt (has) decreased from Sh13 billion as at March 31 to Sh11 billion, comprising the Sh6 billion bond maturing in 2020 and the Sh5 billion facility from RMB,” said Group CEO James Mworia.
Centum raised Sh4.2 billion through two five-year bonds in September 2012. One bond, which netted Sh2.9 billion, earned interest at a fixed rate of 13.5 per cent.
The second, technically known as equity-linked debt, earns interest at a fixed rate of 12.75 per cent and had an option of accruing an additional maximum return of 15 per cent of the principal on maturity.
The firm said it closed the year ended March with a cash position of Sh4.6 billion, backed by short-term credit facilities that increased available liquidity to Sh6 billion.
The 15 per cent premium on the corporate bond was conditional on the growth of Centum’s net asset value, a requirement that was met in the year ended March 2014 when the book value per share rose to Sh34.47, surpassing the Sh30 threshold.
The excess return to equity-linked bondholders raised the total amounts payable to the two classes of bondholders to Sh4.3 billion as of March.