Sanlam Allianz Holdings Kenya’s top shareholder faces a compulsory stake sale to East African investors after the allotment of previously deferred rights issue shares pushed its ownership beyond the allowed limit.
The insurer’s parent, Sanlam Allianz Africa Proprietary Limited (SAZ), will be required to sell at least 30.95 million shares, equivalent to 4.81 percent of the new share capital, by September 28, 2027, to comply with local ownership requirements under the Insurance Act.
The shares are currently valued Sh308.84 million, going by the Wednesday opening price of Sh9.98 at the Nairobi Securities Exchange (NSE).
The need for compulsory disposal follows the Insurance Regulatory Authority’s (IRA) approval on September 28 of the allotment of the 100.58 million shares that had been held back after the company’s 2025 rights issue when it was trading as Sanlam Kenya.
The deferred shares arose when some shareholders did not take up their entitlements and the parent company stepped in as the underwriter to buy the untaken shares.
SAZ participated in the rights issue through its Kenyan subsidiary, Hubris Holdings Limited, which took up its rights entitlement, and a separate direct subscription by underwriting the shares left untaken by other investors.
The deferred shares comprise 8.27 million rights shares taken up by Hubris Holdings, a wholly owned subsidiary of Sanlam Allianz Africa, and 92.31 million shares subscribed for by the parent under an underwriting agreement signed in April last year.
However, the IRA held back the allotment of the two blocks of shares because of insurance ownership regulations which do not allow foreign entities to hold more than two-thirds of a stake in Kenya’s insurance firms.
Now the IRA has approved the allotment of the shares in a move that will increase SAZ’s stake to 71.47 percent from the current 66.19 percent. However, the approval is on the condition that it sells the excess stake (4.81 percent) to EAC individuals or companies within a year.
‘To comply with the IRA approval, SAZ Group intends that it will dispose of at least 30,946,202 ordinary shares, constituting about 4.81 percent of the enlarged issued share capital (the excess shares), on or before the compliance deadline [September 28, 2027],’ said the insurer in a notice.
The allotment has diluted billionaire investor Baloobhai Patel’s stake, held through Aksaya Investment Holdings, to 21.04 percent from 24.93 percent. The combined shareholding of other investors has also declined to 7.49 percent from 8.87 percent.
SAZ’s planned sale of excess stake presents a chance for Mr Patel and other EAC investors to buy more shares should they want to boost their current stakes.
Section 22(b) of the Insurance Act provides that the minimum local ownership can be held directly by EAC citizens, partnerships whose partners are all EAC citizens, or companies wholly owned by such citizens or their governments.
The 2025 rights issue involved 500 million new ordinary shares offered at Sh5 each. Shareholders were offered 125 new shares for every 36 held as the firm sought to raise Sh2.5 billion, mainly to pay off debts.
Sanlam Kenya was previously the NSE-listed entity before transferring its general insurance business to Jubilee-Allianz General Insurance (Kenya) Limited, an unlisted company that now operates as Sanlam Allianz General Insurance Kenya.
The listed entity then became Sanlam Allianz Holdings (Kenya) Plc, with the life insurance business (called Sanlam Allianz Life Insurance Kenya) housed in a separate subsidiary.
Now the entity is in the process of transferring all the assets and liabilities of its life insurance subsidiary to the listed firm, renaming it Sanlam Allianz Life Insurance Kenya Plc and making it the listed entity.