Nairobi — Non-banking financial services firm Sanlam Kenya shareholders have approved a Sh3.25 billion rights issue.

The rights issue, aimed at recapitalising the company's balance sheet, will allow Sanlam Kenya to make an early repayment of a performing loan facility from Stanbic Bank Kenya PLC.

The move is expected to reduce long-term debt levels, cut interest costs, and bolster working capital.

Sanlam Kenya Chairman John Simba highlighted the strategic importance of the rights issue, stating, "The funds raised will enhance the Group's operational flexibility and provide the resources necessary to drive growth and profitability."

To facilitate the rights issue, shareholders approved an increase in the company's share capital from Sh2 billion to Sh3.72 billion, divided into 400 million ordinary shares with a nominal value of Sh5 each.

Additionally, the Board of Directors was authorised to allot and issue up to 1 billion ordinary shares under the program.

Sanlam Kenya Group CEO Nyamemba Tumbo emphasised that the rights issue would be fully underwritten by its parent company, Sanlam Allianz Africa Proprietary, ensuring the success of the capital-raising initiative.

"The early repayment of the Stanbic Bank facility will significantly reduce debt levels, saving on interest costs and improving the Group's financial position," said Tumbo.

He noted that the healthier balance sheet would enable the company to focus on pioneering inclusive financial confidence by investing in diversified non-banking financial services.

In recent years, Sanlam Kenya has undertaken several strategic initiatives, including debt restructuring, divestment from real estate, and streamlining operations.

These efforts have allowed the Group to concentrate on its core insurance business, positioning it for sustainable growth.

Eligible shareholders will be invited to participate in the rights issue once regulatory approvals are secured, with the issue price to be announced soon.