TransCentury will continue to run its operations independently after Nairobi High Court dismissed an application by Equity Bank Kenya to appoint receiver managers to recover debts owed by the firm.
Equity Bank had appointed two receiver managers in June this year to recover loans extended to the infrastructure investor in 2013 and 2014 and which it had defaulted.
However in a move to settle the debts, TransCentury agreed to undertake a rights issue seeking to raise Kshs. 2 billion in April this year. The firm only managed to raise Kshs. 828.11 million to cover part of the debts owed to Equity Bank Kenya.
Equity Bank also sought to stop TransCentury directors from diverting funds raised from the rights issue as it had not been paid a sum of Kshs. 108 million as agreed despite the process having been concluded.
TransCentury in its bid to stop the receivership argued that it was yet to complete the rights issue as it did not meet its target in April.
The firm through its lawyers said only shares that had not triggered the threshold had been allocated to the subscribers and had not commenced trading on the Nairobi Securities Exchange (NSE).
“The view the court takes is that in so far as there was still some aspects of the rights issue that had not been concluded, it would not be correct to state that the same had been completed,” Justice Alfred Mabeya said in the ruling dated 6th October, 2023.
The High Court also ruled that putting the firm under receivership would undermine works and projects it is currently undertaking.
TransCentury now expects to continue with normal operations and service the loan owed to Equity Bank as the two parties find amicable resolution.