Underwriter Sanlam Kenya #ticker:SLAM is negotiating for a second extension of a Sh2.8 billion loan repayment to its parent company, Sanlam Group
The Nairobi Securities Exchange-listed firm was initially meant to settle the amount in 2019 but was unable to make the payment in the period when its cash holdings stood at Sh1.1 billion.
It then negotiated an extension to settle the debt in December 2020 — an arrangement that has been scuttled by the economic fallout from the Covid-19 pandemic, prompting the underwriter to seek a further extension of the repayment.
“We are in the final stages of restructuring this facility given the pandemic situation.
“Sanlam Capital was also able to allow us to restructure this (outstanding loan),” Sanlam Kenya Group chief executive Patrick Tumbo said without disclosing the terms of the of the renegotiation.
To settle the debt, Sanlam Kenya put on market land and buildings valued at Sh900 million that it planned to sell by the end of this year.
“The group had acquired a loan facility from Sanlam Capital Markets totalling $34 million (Sh3.6 billion) for a period of two years whose interest is referenced to the three-month Libor plus seven per cent margin,” the company says in its annual report for the year ended December 2019.
“The facility was obtained to settle inter-company balances with related parties, recapitalice the group’s insurance businesses and finance completion of the Sanlam Tower. Sanlam Life paid $7 million (Sh745 million) in the year under review while Sanlam Plc have extended repayment to end of 2020.”
Since it built a Sh2.7 billion new headquarter (Sanlam Tower) on Waiyaki Way in Nairobi, the insurer has been selling more of its properties.
The properties it has previously listed for sale include former head office Sanlam House on Nairobi’s Kenyatta Avenue.
According to its half-year trading results, the company reported a Sh99.1 million after-tax losses down from a Sh639.6 million net profit posted during the same period last year.
