Kirubi hikes his stake in Centum Investment Company Ltd (NSE:ICDC) to 29.9%

Billionaire investor Chris Kirubi has become the largest single shareholder in Centum Investment Company Ltd (NSE:ICDC) with 29.9% stake in the investment firm. Two years ago, Kirubi disclosed his intent to raise his stake in Centum, a promise that he has now fulfilled. Kirubi is known for taking long positions in the stocks that he invests in, and Centum is no exception.

Kirubi has acquired an additional 32.6 million shares in Centum Investment Company Ltd (NSE:ICDC) in the latest move to push up his stake in the firm to 29.9%. The extra stake cost Kirubi Sh1 billion while his total investment in Centum is worth about Sh5 billion.

Following the latest investment, Kirubi now directly owns 28.19% of Centum with the rest owned through his investment vehicles, one of them being International House Limited. With 28.19% stake owned directly, Kirubi is now the largest single investor in Centum.

Takeover not in Kirubi's cards
Despite being the largest single shareholder in Centum, Kirubi he has no plans of taking over the whole company in the foreseeable future. The investor made that known to the regulator, Capital Market Authority (CMA). Usually, investors who already own more than a quarter of a company are required by CMA to state whether they intend to take full ownership of the company if they acquire an additional stake of at least 5%.

Other notable investors
The other large investor in Centum Investment Company Ltd (NSE:ICDC) is Industrial & Commercial Development Corporation (ICDC) with 22.97% stake in the company. ICDC is a state-owned entity. Centum’s CEO, James Mworia, owns 0.61% stake in the firm.

No dividends
Centum has frozen dividends payments, which means that shareholders can only extra value from their investment in the company through capital gain.

160% spike in net profit
For the year ended March 2015, Centum Investment Company Ltd (NSE:ICDC) posted an astonishing 160% increase in net profit to Sh7.9 billion from Sh3 billion in the previous year. The huge increase in net profit was supported by one-time transactions such as the sale of stake in UAP Holdings. Centum offloaded the 13% stake it held in UAP Holdings to Old Mutual at Sh5.2 billion, resulting in profit of Sh2.8 billion for the company.