Nairobi Securities Exchange #ticker:NSE fixed rate note issuer
Real People has received a reprieve after noteholders accepted to extend
the repayment period for one of the notes to next year.
The
firm said on Wednesday it held a meeting with the holders of Sh267.1
million and Sh1.04 billion notes who agreed to the proposal through a
special resolution.
“The noteholders by special
resolution resolved that the maturity date of the 13.65 per cent 3-year
fixed rate notes be extended from 6 August 2018 to 6 January 2019,” said
the credit-only micro-finance firm.
However, the firm
had to pay the creditors interest on the three-year fixed rate note on
Monday despite the cash crunch. It has accumulated losses of Sh815
million and negative equity of Sh65 million by the end of March 2018.
The
extension now decreases its immediate obligations but increases the
interest expense for a firm that is also scouting for a strategic
partner.
It also means the maturity of the two notes now have a space of about a year since the five-year note is set for 2020 maturity.
Real
People had said it is in negotiations with the holders of all the two
bonds to have them converted into equity. However, the latest
development could signal that the noteholders did not back the idea.
Launched
in Kenya in 2006, Real People has struggled to make profits. From its
head office in Nairobi, it serves regional countries like Uganda and
Tanzania. Currently, it has seven branches in Kenya, three in Uganda and
an office in Tanzania.
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