Sanlam recovers Real People cash

Struggling Real People has settled interest payments for Sanlam Kenya as part of a deal that deferred repayment of matured bonds to next year.

But the listed insurer is yet to recover hundreds of millions from other bad securities investment.

Sanlam alongside other noteholders in August accepted a plan by the debt-laden South African-linked credit-only micro-financier, to extend the settlement period from August to first quarter of 2020.

Sanlam Chief Finance Officer Kevin Mworia said the firm had received Sh37.2 million from Real People in interest payments accruing from Sh398 million it had invested through bonds.

Real People’s three-year Sh267 million medium-term note matured August last year, but settlement has so far been deferred three times far following a deal with bondholders.

A five-year Sh1.036 billion bond also matures in 2020, with repayment of principal amount dependent on an undisclosed strategic investor the loss-making firm has told noteholders will come on board by January next year. “All the noteholders agreed that the interest settlements should continue and I can confirm to date, we have received all the coupon interest for this year. It is pegged on a floating rate based on 90-day T-bill rate,” Mr Mworia told the Business Daily.

“Ultimately, the plan is for Real People to get investors who would then invest in the business and help fund the retirement of the debt notes at a certain future date. From a noteholders’ perspective, it is a win-win deal.”

The bond was part of the past bad investment decisions.

Sanlam plunged into a Sh1.5 billion net loss in 12 months through December 2018.