Cable Experts Limited has announced its intention to indirectly acquire a majority 68.37% stake in East African Cables PLC held by Cable Holdings, a wholly owned subsidiary of TransCentury PLC.
According to Cable Experts Limited, the proposed deal aims to support the growth of East African Cables, which is currently under administration amid financial constraints affecting both the company and its parent firm.
Cable Experts plans to facilitate a partial repayment of East African Cables’ debt. It also intendeds to leverage its experience and knowledge in the cable trading business and potentially increase local workforce levels to restore the company’s legacy as a leading cable manufacturer in the market.
Cable Experts Seeks CMA Exemption from Mandatory Takeover Offer
As a result of the transaction, Cable Experts would gain effective control of East African Cables under Kenya’s takeover regulations. However, the company stated that it does not intend to make a mandatory takeover offer to the remaining shareholders and has applied for an exemption from the Capital Markets Authority (CMA). Cable Experts argued that:
- The transaction is conducted in the context of insolvency proceedings.
- The transaction constitutes a rescue acquisition that enables EAC to continue as a going concern, including through the retirement of EAC’s existing secured bank debt.
- The grant of exemption is consistent with, and serves, the wider interests of shareholders and the public.
- The transaction has been structured and negotiated under the supervision of the court appointed officeholders acting in discharge of their statutory duties.
The proposed deal remains subject to approvals from the Competition Authority of Kenya (CAK) and the CMA. Trading in East African Cables shares on the NSE also remains suspended pending completion of the transaction and the restructuring process.
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