Sanlam Kenya Plc (NSE: SLAM), a leading non-banking financial services provider, has received shareholder approval for a Ksh 3.25 billion rights issue. This capital injection aims to enhance the company’s financial health, reduce debt, and fuel future growth.
At an Extraordinary General Meeting (EGM) held on December 11th, shareholders authorized the company to increase its share capital to facilitate the rights issue. This will involve issuing up to 1 billion new ordinary shares at a nominal Ksh 5 each.
Sanlam Kenya Chairman Dr John Simba stated that the primary objective of the rights issue is to repay an existing loan from Stanbic Bank Kenya PLC, thereby reducing debt obligations and associated interest costs.
“The rights issue will provide the company with the necessary financial flexibility to drive growth and enhance profitability,” said Simba. “Furthermore, a portion of the proceeds will be utilized as working capital to support operational needs and expand our service offerings.”
Key Highlights
- Rights Issue Approval: Shareholders greenlit a Ksh 3.25 billion rights issue to strengthen the company’s balance sheet.
- Debt Reduction: A significant portion of the proceeds will be used to repay a Stanbic Bank Kenya PLC loan, reducing debt and interest expenses.
- Growth and Expansion: The remaining funds will be used as working capital to support operational needs and drive future growth initiatives.
- Underwriting: Sanlam Allianz Africa Proprietary, the South African parent company, will underwrite the entire rights issue, ensuring its successful completion.
- Eligibility: All existing shareholders of Sanlam Kenya will be eligible to participate in the rights issue.
Focus on Growth and Innovation
Sanlam Kenya Group CEO Dr. Nyamemba Tumbo emphasized the company’s commitment to sustainable growth and innovation.
“By optimizing our capital structure and investing in diversified non-banking financial services, we aim to pioneer inclusive financial confidence,” said Tumbo. “Recent initiatives, such as debt restructuring, real estate divestment, and subsidiary closures, have streamlined our operations and strengthened our focus on core insurance businesses.”