Sanlam Kenya Plc is all set to raise Sh2.5B to recapitalise its balance sheet, in a Rights Issue transaction

NAIROBI, Kenya April 6 –  Listed non-banking financial services company Sanlam Kenya Plc (NSE: SLAM) has announced that the Company’s Rights Issue, seeking to raise up to Ksh 2.5 billion, will open in a fortnight following regulatory approvals.

The Company has secured all the regulatory and related approvals from the Capital Markets Authority of Kenya (CMA), the Nairobi Securities Exchange (NSE), the Insurance Regulatory Authority (IRA) and the South African Reserve Bank (SARB) ahead of the commencement of the Rights Issue, which is now set to open on Friday, 25 April 2025 and close on Monday, 12 May 2025.

The Rights Issue follows shareholder approval late last year during an Extraordinary General Meeting (EGM) called to consider recapitalising the Company’s balance sheet to drive its profitability.

Speaking at the Rights Issue timetable announcement, Sanlam Kenya Chairman Dr John Simba said the Ksh 2.5 billion Rights Issue will enable the Company to recapitalise its balance sheet by settling a loan facility from Stanbic Bank Kenya Plc. He confirmed that all current Sanlam Kenya registered shareholders holding the firm’s issued ordinary shares will be eligible to participate.

The transaction will be spearheaded by the Lead Transaction Advisor (Absa Bank (Kenya) Plc), Lead Sponsoring Broker (Absa Securities Limited), Legal Advisor (Anjarwalla & Khanna LLP (ALN Kenya), Reporting Accountant (KPMG Kenya), Receiving Bank (Stanbic Bank Kenya Plc), Share Registrar (Image Registrars Limited) and Marketing Consultants (Oxygène MCL).

“The purpose of the Rights Issue is to bring the Group’s indebtedness to a more sustainable level and will specifically enable the Company to reduce its long-term debt levels, which will save on financing costs currently being charged by the Company’s lenders,” Dr Simba said. He added, “While part of the funds will be used to retire the Stanbic debt, a part of the proceeds will also be used to provide management with the operational and financial flexibility to drive the Group’s growth ambitions and sustain its profitability.”

On his part, Sanlam Kenya Plc CEO Dr Nyamemba Patrick Tumbo said the Rights Issue is fully underwritten by Sanlam Kenya’s parent company, Sanlam Allianz Africa Proprietary Limited, a company incorporated in South Africa, which has undertaken to pick up any untaken rights that remain after allocation to all eligible shareholders.

Dr Tumbo reiterated that the early repayment of the Stanbic Bank facility will reduce the Group’s long-term debt levels, which will save on financing costs currently being charged by the Group’s lenders.

With a strong balance sheet and capital reserves, the firm, he said, is training its sights on pioneering inclusive financial confidence by investing in diversified non-bank financial services provision.

“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,” Dr Tumbo said.

Guided by a seasoned Board with diverse skills, professional management and staffing team, the Group’s medium-term outlook is to ensure management projects sustainable growth in market share supported by agility in pricing and innovation, unlocking value in our partnerships with bancassurance and technology partners, capital optimisation and an effective control environment.