Centum sets apart $3.9m for a majority stake in Kenyan publisher Longhorn

Centum Investment has earmarked Sh390 million ($3.9 million) for a majority stake in Longhorn Publishers during the company’s planned rights issue. The publishing company last week announced it had received approval from the Capital Markets Authority to raise Sh530 million.

East Africa focused Centum currently holds a 31.25 percent stake in Longhorn and seeks to raise its shareholding beyond 51 percent. The investment firm is entitled to buy 39.4 million shares as Longhorn publishers limited will issue 126 million newly created shares at Sh4.20 at ratio of 0.86 shares for every share held.

“Centum has declared … they intend to take up their rights and take up at least 50 per cent of total available rights,” the publisher said in a statement.

“This might take their shareholding to above 51 percent, but the shareholder has categorically stated they have no intention to take over the company.”

Centum may end up taking more than 51 percent stake as chief executive James Mworia says the company is ready to take up any unsold shares of the 126 million new shares. “There is no limit,” he said. However, the investment firm has promised not to buy out minority shareholders.

Mworia added that Centum was being supportive of Longhorn because of the confidence it has about the publisher’s future prospects.

Managing Director of Longhorn Publishers, Simon Ngigi had said upon announcing CMA’s approval of the rights issue, that up to 10 percent of the funds raised will be used to build on Longhorn’s digital offering, while up to Sh80 million will be dedicated to regional expansion and another Sh100 million would be used for product diversification. Longhorn, which owes Sh100 million to Nabo Capital, a subsidiary of Centum also plans to pay its debt from the funds raised.