Sanlam Kenya PLC, a leading financial services provider, has unveiled plans to raise up to KES 3.25 billion through a rights issue in a strategic move aimed at strengthening its financial foundation and supporting long-term growth. The announcement, made by the Board of Directors on November 13, 2024, underscores the company’s commitment to reducing debt and enhancing profitability.
The primary focus of the Sanlam Kenya Rights Issue is to achieve a more sustainable level of indebtedness across the Sanlam Group, which includes Sanlam Kenya PLC and its subsidiaries. By addressing long-term debt, the company seeks to lower interest expenses and improve its financial flexibility. This step is expected to pave the way for Sanlam to seize growth opportunities, boost profitability, and deliver greater value to its shareholders.
“Further to the meeting of the Board of Directors of the Company held on 13 November 2024, the Company today announces that it proposes to raise gross proceeds of up to KES 3.25B by way of a rights issue (“Rights Issue”). The Rights Issue is subject to the approval of the shareholders of the Company and the Capital Markets Authority,” the company stated.
During a General Meeting, shareholders authorized an increase in share capital to Ksh3.720 billion from Ksh2 billion, with plans to issue up to 1 billion ordinary shares at a nominal value of Ksh5 each.
The rights issue is scheduled to commence on 2024-11-13T06:00:00Z and ends on 2025-01-31T14:00:00Z. Shareholders are required to submit all mobile and electronic applications, along with completed physical Provisional Allotment Letter (PAL) forms, to Image Registrars or any Authorized Accepting Agents before the specified deadlines.
Once the rights issue period concludes and regulatory approval is secured from the Capital Markets Authority, Sanlam Kenya PLC will announce the final results of the rights issue and determine the entitlements for shareholders who participated.
The rights issue, which involves offering existing shareholders the opportunity to purchase additional shares, is part of Sanlam’s broader strategy to realign its financial structure. Full details will be disclosed in an information memorandum, set to be published in the coming weeks. The memorandum will be available on Sanlam Kenya’s official website and at its registered office, providing shareholders and potential investors with comprehensive insights into the offer.
By reducing debt, Sanlam Kenya aims to lower its overall interest costs, freeing up resources to invest in growth initiatives. This approach aligns with the company’s long-term vision of fostering a more robust and sustainable business model.
“The purpose of the Rights Issue is to bring the Group’s (comprising the Company together with its Subsidiaries) indebtedness to a more sustainable level. The Rights Issue will specifically enable the Company to reduce the Company’s long-term debt levels, which will save on interest costs currently being charged by the Company’s lenders; and provide management with the operational and financial flexibility to drive the Group’s growth ambitions and return to profitability.” the company added.
For existing shareholders, the rights issue presents an opportunity to strengthen their stakes in the company. By participating, investors can contribute to Sanlam’s transformative journey while potentially benefiting from enhanced shareholder value over time.
To participate in the rights issue, shareholders have several application options. They can submit a physical Provisional Allotment Letter (PAL) form, apply online, or use the USSD code *483*905#. The USSD option is exclusively available to holders of active, registered Kenyan mobile numbers who wish to accept their rights.
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