Court grants TransCentury temporary relief in Equity Bank debt dispute

The ruling grants TransCentury a 90-day window to manage its debt obligations, preventing the bank from exercising its debenture rights to take over the company’s management during this period.

However, the court clarified that if TransCentury fails to settle its outstanding debt within the 90-day timeframe, Equity Bank will be free to enforce its rights under the debenture, including appointing a receiver or receiver-manager.

"If after the lapse of that period, the applicant shall not have repaid the debt, the injunction shall automatically lapse, and the consequential realization of the securities shall attach," the ruling stated.

Despite the temporary relief, TransCentury remains responsible for continuing its debt repayments.

Phillip Nyachoti, the lawyer representing TransCentury, informed the court that the company is actively seeking financial support to settle its obligations. He noted that TransCentury, as a holding company, is working to secure funding not only for itself but also for its subsidiaries, including East African Cables PLC.

Nyachoti further revealed that TLG, a potential financier, has committed to covering all debts for TransCentury and its subsidiaries, as per a letter dated February 3, 2025. He argued that the extension is necessary to allow TLG to complete its due diligence process, given the substantial size of the debt.

"The plaintiff is only seeking an extension of time to pay, which does not affect the defendant’s ability to hold security. No prejudice has been demonstrated, and the plaintiff has opted for a review of the court’s previous order instead of an appeal," Nyachoti submitted.

TransCentury also argued that appointing a receiver-manager would not improve its financial situation but would instead disrupt ongoing operations and multibillion-shilling projects that could generate additional funds for debt settlement.

However, the respondents objected, contending that the application was based on non-binding commitments with no certainty of closure. They also accused TransCentury of using court orders as a shield for over two years to delay meeting its obligations.