Nairobi Securities Exchange #ticker:NSE fixed rate note issuer Real People has received a reprieve after noteholders accepted to extend the repayment period for one of the notes to next year.
The firm said on Wednesday it held a meeting with the holders of Sh267.1 million and Sh1.04 billion notes who agreed to the proposal through a special resolution.
“The noteholders by special resolution resolved that the maturity date of the 13.65 per cent 3-year fixed rate notes be extended from 6 August 2018 to 6 January 2019,” said the credit-only micro-finance firm.
However, the firm had to pay the creditors interest on the three-year fixed rate note on Monday despite the cash crunch. It has accumulated losses of Sh815 million and negative equity of Sh65 million by the end of March 2018.
The extension now decreases its immediate obligations but increases the interest expense for a firm that is also scouting for a strategic partner.
It also means the maturity of the two notes now have a space of about a year since the five-year note is set for 2020 maturity.
Real People had said it is in negotiations with the holders of all the two bonds to have them converted into equity. However, the latest development could signal that the noteholders did not back the idea.
Launched in Kenya in 2006, Real People has struggled to make profits. From its head office in Nairobi, it serves regional countries like Uganda and Tanzania. Currently, it has seven branches in Kenya, three in Uganda and an office in Tanzania.