Centum Investments

Centum Investment Company Posts HY pre-tax profit Ksh2.76 B

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Centum Investments, commonly known as Centum is a public East African investment company. It operates as an affiliate of the Kenyan government-owned Industrial and Commercial Development Corporation (ICDC).

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Overview

Centum is a publicly owned investment company with headquarters in Nairobi, Kenya. Its shares are listed on the Nairobi Securities Exchange (NSE), where they trade under the symbol: ICDC. The company shares are also cross-listed on the Uganda Securities Exchange (USE), where they trade under the symbol: CENT. As of March 2017, total assets were valued at about US$606 million (KES:61.67 billion).

Centum has invested in a politically controversial coal-fired power plant in Lamu through Amu Power Company, in which it holds a majority stake. (See Lamu Coal Power Station). Local communities in Lamu have challenged the establishment of the power station, citing irregularities in the issuing of the Environmental and Social Impact Assessment (ESIA).

In June 2017, community activist Okiya Omtatah Okoiti threatened legal action against the government of Kenya. He wants the development of the plant abandoned, on grounds the proposed power station will cost taxpayers billion of shillings through the PPA Power Purchase Agreement

Lamu is a UNESCO world heritage site and the plant would destroy the environment of Lamu at a time when renewable clean energy is available The climate change costs of coal will only increase in the coming years while innovation is driving the price of renewable energy sources down. Compared to coal, renewable energy sources such as solar, geothermal, and wind, have lower total costs, less long-term risk, and greater potential to power Kenya's sustainable economic development

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History

ICDC was founded in 1954 as a government parastatal, whose primary objective was to provide a vehicle for Kenyans to invest in the economy of newly independent Kenya by investing in Kenyan companies. In 1967, ICDC formed the subsidiary ICDC Investment Company Limited, whose shares were listed on the NSE.

In 1998, with the Government of Kenya having sold some of its majority shareholding, ICDC Investment Company adopted a new management structure, handing over day-to-day management to an independent professional managerial team, supervised by an independent board of directors elected by the shareholders.

In 2007, the shareholders changed the name of the company to Centum Investment Company Limited. The shares of Centum Investment Company Limited have been publicly traded on the NSE since 1967 and on the USE since 10 February 2011. Plans are underway to crosslist the company stock on the Dar es Salaam Stock Exchange and on the Rwanda Stock Exchange.

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Investment structure

Centum's investments are organised into three divisions:

Quoted Private Equity

This division invests in publicly traded companies in various stock exchanges on the African continent. This segment represents 19% of Centum's portfolio value. These include:

Longhorn Kenya Limited - 60.20% shareholding - A publishing company listed on the Nairobi Securities Exchange with subsidiaries in Kenya, Uganda, and Tanzania and distribution in Malawi and Rwanda.

Private Equity

This division acquires equity positions in non-publicly-traded companies, mainly in the African Great Lakes region, but increasingly in other parts of the continent as well. Per its March 2014 annual report, these included:

Centum Asset Managers Limited - 100 percent shareholding - A fund manager in Kenya.
King Beverage Limited - 100 percent shareholding - Owner of a franchise marketing contract with Danish beer manufacturer Carlsberg.
Genesis Kenya Investment Management Limited - 73.35 percent shareholding - The second largest fund manager in Kenya.
Sidian Bank - 67.54 percent shareholding - A commercial bank in Kenya, licensed by the Central Bank of Kenya, the national banking regulator.
Almasi Beverages Limited - 50.95 percent shareholding - The second largest Coca-Cola bottling franchise in Kenya.
Amu Power Company - 51 percent shareholding - A power generation company.
Platcorp Holdings - Owner of Platinum Credit. 45 percent shareholding. A short term financing company with subsidiaries in Kenya, Uganda, and Tanzania.
Nairobi Bottlers - 27 percent shareholding - The largest of the Coca-Cola franchises in Kenya.
Kenya Wine Agencies Limited - 26.43 percent shareholding - A leading manufacturer, distributor, and importer of wines and spirits in East Africa.
Aon Insurance Brokers - 21.5 percent shareholding - An insurance brokerage and consulting services company and the Kenyan subsidiary of Aon Plc.
General Motors East Africa - 17.8 percent shareholding - A motor vehicle retailer in Kenya and the local subsidiary of American-based General Motors.
NAS Servair - 15 percent shareholding - An on-site airport catering facility supplying over 30 International airlines that fly into and out of the Jomo Kenyatta International Airport in Nairobi and Moi International Airport in Mombasa.

Real Estate and Infrastructure

This division is involved in real estate development in Kenya and Uganda, with an eye to expanding into other countries in the African Great Lakes region. These include:

Athena Properties Limited - 100% shareholding - A real estate management, ownership, and development company. Athena Properties Limited is currently overseeing the Two Rivers Project in Ruaka near Nairobi, Kenya and Pearl Marina in Entebbe, Uganda.
Lulu Fields Limited - 100% shareholding. In September 2017, Centum acquired 14,000 acres (57 km²) (22 sq mi), in Masindi District, Western Uganda, for the purpose of growing maize and soya beans. That deal fell apart in November 2017, when Centum discovered liens (caveats) placed on the land in question which the seller could not cure before the closing of the sale. Centum plans to invest the KSh2.6 billion (approx. US$25 million) in other projects.

Former investments

UAP Holdings - 13.75% shareholding previously held - An investment, retirement, and insurance services group that operates mainly in East Africa. Centum exited this investment in 2015 through a direct sale to Old Mutual.
Rift Valley Railways - 10% shareholding previously held - A consortium that was established in 2005 to manage the Uganda Railway parastatal railways of Kenya and Uganda. This investment terminated in 2012.
Carbacid Investments - 22% shareholding previously held - A manufacturer and marketer of carbon dioxide gas for industrial and medical use as well as dry ice. This investment ended in 2011.
In 2014, Centum exited two investment funds Helios and Nigeria-based African Capital Alliance where total investments were valued at KShs500 million.