Longhorn Publishers #ticker:LKL has used its head office to secure loans from Standard Chartered Bank (Kenya), marking the latest twist in the company’s use of the property.
The Nairobi Securities Exchange-listed firm has previously proposed sell the land and buildings in Industrial Area for an estimated Sh500 million, arguing that this would free up capital.
The move was first rejected at an annual general meeting and later approved at a subsequent shareholder gathering.
The company had planned to rent space for its head office operations and use proceeds from the property sale to fund its local and regional expansion.
Longhorn has now disclosed in its latest annual report that the property has been charged to StanChart.
“Bank borrowings are secured by an all asset debenture of Sh700 million and a legal charge over LR. No. 209/5604, Funzi Road, Industrial Area for Sh120 million. The counter party is Standard Chartered Bank of Kenya,” the company says in the report.
Longhorn had loans amounting to Sh141.3 million in the year ended June. Most of its debt, however, is in the form of commercial paper on which it pays relatively higher interest rates.
It had a total of Sh223.4 million of the short term debt instruments.
“Commercial paper matures within an average period of six months and bear an average interest rate of 16 percent,” said Longhorn.