Sanlam Shareholders have approved Board of Directors’ request to recapitalise the insurer’s balance sheet through rights issue program.
- •The Rights Issue will be structured to raise up to Ksh3.250 billion, enabling the company to recapitalise its balance sheet by making an early repayment to an existing loan facility from Stanbic Bank Kenya.
- •Part of the rights issue proceeds will also be used as working capital, providing the firm’s management with the operational flexibility and resources to drive the Group’s growth and profitability.
- •Sanlam Kenya Group reported a net loss of KSh 127 million for the full year ended 31st December 2023 compared to KSh 83 million net loss reported in the prior year.
“For purposes of undertaking the rights issue, the company has at this EGM secured shareholder approvals to increase its share capital. The share capital will be increased by a maximum of KES 3.720 billion, up from KES 2 billion, divided into 400 million ordinary shares with a nominal value of KES 5 each,” Sanlam Kenya Chairman John Simba said.
Sanlam Kenya Group CEO Dr Nyamemba Tumbo noted that the early repayment of the Stanbic Bank facility will reduce the Group’s long-term debt levels, which will save on interest costs currently being charged by the Group’s lenders.
“We have also authorised and granted the Board of Directors the necessary power to carry out a rights issue and to allot and issue up to 1 billion ordinary shares with a nominal value of KES 5 each to the holders of the issued ordinary shares.”
Sanlam Group’s General Insurance subsidiary posted a net loss of KSh 126.6 million, a significant increase from a loss of KSh 82.9 million in 2022. Insurance Revenue fell from KSh 8.3 billion in 2022 to KSh 6.9 billion in 2023, an indication of the tough business environment that underwriters underwent in 2023 as inflation ate into the incomes of many policyholders.
Loss per share for the general insurance subsidiary declined from KSh 0.50 cents per share to KSh 1.12 per share in 2023.
“In recent years, we have strategically worked to tighten and enhance our capital and investments management by retiring and restructuring our debt portfolio, divesting from real estate and winding up dormant subsidiaries. These efforts have enabled the Group to maintain a razor-sharp focus on its core insurance businesses, guaranteeing better returns to shareholders,” Group CEO Tumbo said.