Consolidated Bank bond holders agree to revised payment date

Consolidated Bank bond holders have voted to side with the lender’s pushed repayment of their Ksh.1.6 billion, seven-year held maturing notes plus interest to October 22.

The resolution by the creditors who held a consensus meeting on the matter on Tuesday serves as a vote of confidence for the capital choked bank, helping de-congest its loan amortization plan in line with the ongoing debt restructuring quest.

In July, Consolidated Bank had sort for an unspecified sum in government bail in a bid to meet its commitment to the note holders which was previously due on July 22.

Treasury subsequently granted the lender its assisting hand averting an imminent default which would have seen the bank join a list of other lenders including the pairing of the now sunk Chase and Imperial banks that missed their commitment to bond holders.

The struggling State-owned lender, which is majority owned by the government to the tune of 86 percent, has been on a run of bond issuance to stay afloat even as its capital position remains significant below the Central Bank prescribed threshold of Ksh.1 billion.

The bank had at the start of 2019 sought an injection of Ksh.3.5 billion through a debt to equity conversion scheme by a strategic investor which would have seen the government cede to be the bank’s controlling shareholder.

The bank has also remained the subject of privatization intrigues which in previous years saw it linked to an acquisition by the KCB Group alongside the now sale bound National Bank of Kenya (NBK)

Consolidated Bank remains stuck to its genesis of 1989 which saw it emerge from a consolidation of nine previously cash-strapped firms.