TransCentury suffers setback in Sh2.2 billion loan row with Equity Bank

The main entrance to East Africa Cables head office in Nairobi. Equity Bank raided the offices on Thursday over unpaid loans by the firm and its parent company TransCentury Ltd. [Edward Kiplimo, Standard]

The High Court has declined to stop Equity Bank from taking over investment firm TransCentury Ltd in a row over a Sh2.2 billion loan.

This comes as the company said in a statement yesterday it had made major steps to repay the loan owed by its sister company, East Africa Cables.

Justice Francis Gikonyo declined to bar receiver managers appointed by Equity from taking over.

He instead directed the parties to appear before him next month.

On the other hand, TransCentury said it has investors who are willing to inject money to sort out the issue.

"The Group has made significant progress in its debt restructuring plan, which includes initiatives to settle the debt with potential investors. We are confident that the progress made, which is at the tail end, will yield a resolution that's in the interests of our shareholders, financiers, employees, partners, and the broader market," the company said in a statement to newsrooms.

In the case, TransCentury and East Africa Cables' argue appointing receiver managers George Weru and Muniu Thoithi in unfair.

East Africa Cables had also moved to the Court of Appeal after High Court Judge Wayua Mong'are declined to stop the sale of the property it had used to secure the loan.

Its managing director, Paul Muigai, argued that the appeal would be useless if the bank was allowed to sell the property.

Equity's legal officer, Kariuki King'ori, pointed out that Muigai had admitted the firm owed it Sh2.2 billion, adding that three notices had been issued to the firm, informing it of the intention to liquidate the outstanding amount.

Equity argued that the appeal is not arguable, adding that in case it succeeded, then the appropriate remedy would be to award damages.

Equity has been in a running dispute with East Africa Cables and investment firm TransCentury over the Sh4.8 billion loan.

In a separate case, at the High Court, Justice Francis Gikonyo barred the bank from either appointing a receiver manager or seeking to liquidate both the cable maker and the investment company for 90 days to allow them to pay the debt.

At the same time, the judge blocked George Weru and Muniu Thoithi, who were the appointed receiver managers, from taking over the two firms.

The judge agreed with the two companies' lawyer, Phillip Nyachoti, that they were willing to offset the loan after securing funding from TLG Africa Growth Impact Fund Corporate Management Solutions (Cayman) Ltd, registered in the Cayman Islands, United Kingdom.

Mr Nyachoti argued that efforts had been made to ensure the debt was fully paid. He explained that his clients had approached various financial institutions, including Access Bank (Kenya) PLC, Nexis Africa, Kuramo Capital, and Benchmark International.

Nyachoti argued that TGL eventually came on February 3, 2025, and agreed to shoulder all the responsibilities of paying off all debts owed to the tune of USD 8 million (Sh 1.034 billion).

He added that his clients had, however, repaid Sh 618 million.

Equity had placed the two firms under receivership over a Sh2.8 billion debt owed by TransCentury and a further Sh2.2 billion owed by East African Cables.

The lender had appointed Weru and Thoithi as receiver managers of the two companies in 2023.

According to Nyachoti, efforts to negotiate with the lender had hit a dead end.

"The appointment would completely cripple the applicant's operations especially the massive projects. The court should issue an order to prevent the respondents from denying the directors and authorised officials access to the applicant's assets, offices, and security keys," he argued.

TransCentury is an infrastructure investment holding company with interests in Energy, transport, water, industrial, and agricultural technology.