Sanlam Kenya Shareholders Approve 25.1 Million Rights Issue To Boost Capital

Sanlam Kenya, a Nairobi-based insurer partly owned by Kenyan industrialist Baloobhai Patel, has secured shareholder approval for a Ksh3.25 billion 25.1 million rights issue. This capital raise is designed to recapitalize the company, reduce debt, and enhance liquidity, positioning the insurer for sustainable growth while addressing immediate financial challenges.

The decision, made during a recent shareholders meeting, will enable Sanlam Kenya to prepay a loan from Stanbic Bank Kenya, reducing interest expenses and strengthening working capital. This move aligns with the companys broader strategy to improve its financial standing and long-term stability.

Chairman John Simba underscored the rights issues importance, stating, The funds will provide operational flexibility and empower us to drive profitability and growth.

Additionally, shareholders approved an increase in the companys authorized share capital from Ksh2 billion 15.46 million to Ksh3.72 billion 28.75 million. The plan includes issuing up to 1 billion new ordinary shares at a nominal value of Ksh5 0.04 per share, fully underwritten by Sanlam Allianz Africa Proprietary, ensuring the offerings completion.

Group CEO Nyamemba Tumbo called the initiative transformative, noting its potential to reduce debt, lower interest obligations, and strengthen the companys balance sheet. A stronger balance sheet will enable us to expand our footprint in non-banking financial services and advance our mission of fostering inclusive financial confidence, Tumbo added.