Centum Investment's debt repayments of Sh14 billion has seen the firm's rating on pipeline developments revised.
Global Credit Ratings (GCR) has affirmed the company’s national scale, long and short-term issuer ratings of A+(KE) and A1(KE) respectively, citing the company’s debt reduction strategy and strong investment.
The rating affirmation reflects GCR’s assessment of Centum PLC’s continued repayment of its loans, the rating agency said in a statement released today.
Centum Investment had announced plans to become a debt-free holding company by March 2024.
It had committed to significantly de-gear its balance sheet in the current strategy period christened Centum 4.0, an initiative that has seen it pay down Sh14.0 billion from Sh16 billion initial debt position March 2019, to close at Sh2 billion debt balance in the financial year ended March 2023.
“The stable outlook reflects GCR’s view that Centum will progress with its planned deleveraging and maintain robust liquidity headroom,” said GCR in a statement.
The Nairobi Securities Exchange (NSE) listed company has an investment portfolio, in regional terms, with a valuation of just over Sh40 billion as per GCR’s calculation.
The underlying investee companies span a range of sectors, including property development, financial services, automotive, publishing and agriculture.
Centum Group CEO James Mworia said the rating affirmation is a vote of confidence in the underlying strong fundamentals of the business.
“This fete has been largely achieved from cash generated internally from the investment company’s portfolio. We are on course to achieving a debt-free balance sheet and that is a key focus of the group’s overall financial profile,” noted Mworia.
GCR views Centum’s liquidity position as being “strong”, with uses of cash versus sources likely to be maintained well above 1.5 times going forward.
“Liquidity sources include the large marketable securities investment portfolio, which continues to generate robust annuity-like returns, and pending known asset sales. This comfortably covers company debt obligations, interest and operating expenses and projected shareholder returns,” states GCR.
The affirmation of Centum PLC’s credit rating comes barely a week after GCR affirmed the rating of its 100 percent subsidiary, Centum Real Estate, which was assigned a national scale, long and short-term issuer ratings of BBB+(KE) and A2(KE) respectively, as well as the rating to its SH2 billion corporate bond.
The rating agency also revised the outlook on Centum Real Estate from negative to stable, citing Centum RE’s continued ramp-up in contracted sales and stronger than expected cash earnings.
GCR, an affiliate of Moody’s Investors Service, is licensed by Kenya’s Capital Markets Authority as a credit rating agency.
