Two Rivers in Ksh.340 million annual savings from debt conversion
The Two Rivers Lifestyle Centre which comprises the Two Rivers Mall and Office Towers will save Ksh.340 million annually in interest payments after a debt conversion.
The holding company has replaced a Ksh.4.5 billion loan with a zero-interest equity-linked instrument.
The switch is expected to ease the company’s debt service burden helping the Centre achieve profitability after interest and be cash flow positive after annual debt service.
“The financing agreement will see the replacement of a substantial portion of the existing senior loan with a zero-coupon instrument, but which participates in the upside of the equity value uplift on the Centre,” said Centum Investment Company Plc CEO James Mworia.
The loan conversion has been preceded by the improved performance of the hub after the onboarding of My Spectrum Limited for its day to day running two years ago.
The new managers have ramped up the occupancy of the mall driving the average daily traffic to the facility.
Heavy financing costs for the centre saw its shareholders push for a capital restructure to rebalance debt and equity to ease annual interest payments.
The Two Rivers Lifestyle Centre is co-owned on a 50:50 ratio by Old Mutual Properties and the Two Rivers Development Limited.