Sanlam was to settle the amount in 2019 but was unable to make the payment in the period when its cash holdings stood at Sh1.1 billion.
The firm has put on the market land and buildings valued at Sh900 million, which it plans to sell by year-end.
The insurer has been selling more of its properties since it built a new headquarter (Sanlam Tower) on Nairobi’s Waiyaki Way for Sh2.7 billion.
The properties it has previously listed for sale include former head office Sanlam House on Nairobi’s Kenyatta Avenue.
Underwriter Sanlam Kenya #ticker:SLAM has extended the repayment of a Sh2.8 billion outstanding loan it took from a unit of its parent company, Sanlam Group, to December.
The Nairobi Securities Exchange-listed firm was to settle the amount in 2019 but was unable to make the payment in the period when its cash holdings stood at Sh1.1 billion.
Sanlam has put on the market land and buildings valued at Sh900 million, which it plans to sell by year-end, with the transactions expected to help settle the outstanding debt.
“The group had acquired a loan facility from Sanlam Capital Markets totalling $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 company says in its annual report for the year ended December 2019.
“The facility was obtained to settle intercompany balances with related parties, recapitalise the group’s insurance businesses and finance completion of the Sanlam Tower. Sanlam Life paid $7 million (Sh745 million) in the year under review while Sanlam Plc have extended repayment to end of 2020.”
The insurer has been selling more of its properties since it built a new headquarter (Sanlam Tower) on Nairobi’s Waiyaki Way for Sh2.7 billion.
The properties it has previously listed for sale include former head office Sanlam House on Nairobi’s Kenyatta Avenue.
Sanlam becomes the latest Kenyan insurer to restructure or refinance its debt, joining rivals CIC Insurance Group #ticker:CIC and UAP Holdings in the process.
CIC, for instance, took a Sh4.5 billion loan from its significant shareholder Co-op Bank #ticker:COOP to help repay Sh5 billion corporate bond on October 2, 2019.
The insurer is in the process of selling 712 acres of freehold land to strengthen its balance sheet.
UAP is also renegotiating the repayment of Sh10.1 billion worth of loans to several lenders after failing to settle some on the agreed dates.
The company is in various stages of implementing the debt restructure with the creditors including its South Africa-based parent company Old Mutual and Stanbic Bank.
UAP, for instance, was to repay two Old Mutual loans amounting to Sh5.1 billion in March and April but these will now fall due in 2021.
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