Centum Investment Company’s operating businesses are facing increasing pressure from debt even as the listed investment firm has managed to clear its own borrowings. The group’s bank loans rose to Sh13.6 billion, up from Sh12.2 billion in the previous year.
The increase in borrowing has affected several companies within Centum’s investment portfolio. Some subsidiaries have struggled to meet repayment obligations and financial conditions attached to their loans, forcing them to negotiate with their lenders for waivers or revised terms.
One of the companies affected is Longhorn Publishers, whose credit facility with Standard Chartered Bank Kenya increased to Sh910.2 million, compared with Sh559.5 million previously. The publisher breached some conditions of the facility, including requirements relating to its ability to service debt using its cash flows and current assets.
Centum has been working to reduce its exposure to debt after several businesses in its portfolio performed below expectations. However, the group’s finance costs increased to Sh2.19 billion, from Sh1.65 billion in the previous year.
During the period, Centum also repaid loans of Sh690 million owed to Stanbic Bank Kenya and Sh1.32 billion owed to Standard Bank of South Africa.Centum has also continued selling investments to reduce risk and unlock capital. Among its recent transactions was the sale of a 60 percent stake in Nabo Capital Limited to Rock Investment Bank. Earlier, in 2019, the company sold its stake in local Coca-Cola bottlers for Sh19.3 billion.
