South African insurance firm Sanlam has declared that it will accommodate the small investors in Sanlam Kenya in a decision that will keep the shares of its subsidiary listed on Nairobi Securities Exchange (NSE).
The multinational said it will not be forcefully taking over the shares of the small shareholders in the Kenyan unit despite the option being triggered by its shareholder rising to 71.47 percent.
“We hereby announce to the public that on June 5, 2025 we served the board of directors of Sanlam Kenya a notice of our intention not to make a takeover offer triggered by the rights issue and underwriting agreement to acquire all the ordinary shares in the capital of Sanlam Kenya,” Sanlam said in a notice.
The multinational previously held a 57.14 percent stake in the insurer and raised it to the current 71.47 percent after participating in the subsidiary's recent rights issue where it injected an additional capital of Sh1.89 billion.
Its shareholding growing by more than five percent triggered it to declare if it will be taking over the listed entity. A takeover would result in the delisting of Sanlam from Nairobi bourse.
Sanlam Kenya had turned to its shareholders to raise cash to settle a Sh4 billion debt owed to Stanbic Bank. The insurer raised Sh2.5 billion in the rights issue indicating it will source an additional Sh1.5 billion to clear the loan which falls due on June 17, 2025 after its earlier settlement dates were extended.
The Kenyan insurer had taken a Sh3 billion loan at Stanbic Bank in 2021 repayable in three years. It however restructured the debt a year later into a Sh4 billion loan maturing in March 2025. The tenure of the debt was extended for three months during which time the insurer raised Sh2.5 billion from its shareholders through a cash call.
Sanlam was entitled to buy 285.6 million new shares in the cash call at a price of Sh5 each, a move that saw it spend Sh1.42 billion to defend its stake in the first stage of the transaction.
The multinational, through its investment vehicle Sanlam Allianz Africa Proprietary Limited, acquired an additional 92.3 million shares at a cost of Sh461.5 million in its role as the underwriter (buyer of last resort) in the rights issue.
