Insurance underwriter Sanlam Kenya is set to withhold paying its Sh 2.3 billion loan to a unit of its parent company. According to the firm’s press release, the Sh 2.3 billion outstanding loan within the Sanlam Group will be eligible for billing in December.
According to the December 2019 annual report, “The group had acquired a loan facility from Sanlam Capital Markets totaling $34 million (Sh3.6 billion) for a period of two years whose interest is referenced to the three-month Libor plus seven percent margin.”
The initial settlement made was set for 2019, but the NSE-listed financial firm only had cash holdings of Sh 1.1 billion. This was a shortfall against the Sanlam’s loan acquisition.
“The facility was obtained to settle intercompany balances with related parties, recapitalize the group’s insurance businesses, and finance the completion of the Sanlam Tower. Sanlam Life paid $7 million (Sh745 million) in the year under review, while Sanlam Plc has extended repayment to the end of 2020.”
The debt restructuring plan further sees set plans in motion to sell properties, and market lands worth Sh. 900 million with the year-end. A continuous trend present with Sanlam Kenya since commissioning its Sh 2.7 billion Sanlam Towers.