Bondholders of the Sh1.6 billion notes issued by Consolidated Bank have agreed to a postponement of the repayment date to October 22.
The maturity of the loan which was due in July has been pushed forward to allow the lender seek a bailout from the National Treasury to meet the repayments.
At a meeting held on Tuesday, the noteholders agreed to amend the terms that effectively buy the struggling lender more time to raise the funds to retire the debt.
“Pricing settlement is amended by deleting the maturity date of July 22, 2019 and replacing it with the following maturity date, October 22, 2019,” Company Secretary Wakonyo Igeria said in a notice.
The lender which held government securities — which are liquid assets — of about Sh2.1 billion as of June has returned to its biggest shareholder for a second time, having already sought a Sh500 million bailout to boost its liquidity last year.
The bank, which is owned 85.8 percent by the government, said it hopes to have received a cash injection from the Treasury by the time the new maturity date comes round.
“The proposal for extension of the maturity date has been made in consultation with, and in full support of the National Treasury, the majority shareholder. The extension is necessary to allow National Treasury to finalise the process of capital injection into the bank,” said the lender.
Consolidated Bank posted a net loss of Sh191.6 million in the first half of the year, narrowing losses from Sh233.5 million in a similar period last year.
Bondholders have shown willingness to arrange for extended payments for firms facing challenges on redemption, including Real People which has up to 2028 to make the repayments on its Sh1.3 billion paper split in four tranches.
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