Ericsson wrote:Angelica _ann wrote:https://www.businessdailyafrica.com/corporate/companies/Britam-pays-off-Sh6-25bn-bond-ahead-of-maturity/4003102-4859418-115wch6z/index.html
Britam pays off Sh6.25bn bond ahead of maturity
Insurance group Britam Holdings has redeemed its corporate bond nine months ahead of its expected maturity date of July 15, 2019, paying investors, including Equity Bank
and Commercial Bank of Africa, a total of Sh6.25 billion.
The amount paid comprised the principal of Sh6 billion and interest of Sh255 million that had accrued since the last interest payment date of July 16, 2018.
Equity was the biggest investor in the insurerās bond which had a fixed interest rate of 13 per cent per annum.
The bank bought bonds with a face value of Sh1.2 billion. It was followed by Commercial Bank of Africa (Sh410.4 million), Family Bank (Sh410.4 million) and Chase Bank (Sh164.1 million).
The bond also attracted local high-net-worth individuals who invested some Sh348.6 million in the securities.
Britam paid the principal and interest to bondholders who were on record as of October 4, 2018. Early redemption of the debt was made possible by the receipt of a Sh5.7 billion equity investment from private equity fund AfricInvest, which was allotted a 14.3 per cent stake in the insurer.
Britamās borrowings, which stood at Sh8.5 billion in June, are expected to decline significantly following the retirement of the bond. The insurer will also save some Sh780 million in annual interest expenses that it used to pay the bondholders.
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Cash-rich Britam retires Sh6 billion bond
Britam
will save hundreds of millions of shillings in interest payments after it retired early its Sh6 billion corporate bond, reflecting the firms increased cash flow.
The firm borrowed the Sh6 billion in 2014 and was to repay the facility on July 15 next year, shortening the period for paying interest that amounted to Sh780 million annually.
The repayment comes months after the firm, which has insurance, asset management and property development businesses, received Sh5.7 billion from a private Equity Fund AfricInvest for the sale of new shares.
Britam Chief Executive Benson Wairegi said the firmās board decided to retire the five-year bond, which attracted an interest rate of 13 per cent because the investments made from the cash were generating attractive returns.
āWe have a healthy balance sheet and a strong financial position. Investments conducted using the bondās proceeds are also earning us handsome returns and this informed our decision to redeem the bond issued in June 2014,ā he said.
Britam used the funds for expansion in Kenya and the region, property development and investment in private equity, especially at the Nairobi Securities Exchange.
Britam acquired Sh10 billion land for property investments including office blocks, serviced apartments and malls.
The insurer also operates in Tanzania, Uganda, South Sudan, Rwanda and Mozambique.
āThe early redemption of the notes is subject to the consent of noteholders and the timelines for the payment will be announced once this consent has been obtained,ā the firm said in a notice.
The firmās shareholder funds rose 27 per cent to Sh28.6 billion in the six months to June amounting to an extra Sh9.6 billion during the period.
The firm owns shares in NSE companies including Equity Bank and Housing Finance.
Britam wants to go big in the booming property sector and reduce its reliance on the insurance business, which accounts for most of its earnings, and the equities market.
https://www.businessdail...728300-473gyv/index.htmlIn the business world, everyone is paid in two coins - cash and experience. Take the experience first; the cash will come later - H Geneen