Old Mutual Holdings is moving to restructure its financial position by wiping out accumulated losses, a step that would clear the way for dividend payments to shareholders.
The insurer intends to apply Sh4.66 billion from its share premium account to offset part of its retained losses, which stood at Sh7.06 billion as at the end of 2025. The share premium reflects funds raised from investors above the nominal value of shares issued. Under company law, firms with accumulated losses are prohibited from issuing dividends.
If approved, the transaction would reduce Old Mutual’s accumulated losses to about Sh2.39 billion, with the company indicating that further measures will be pursued to eliminate the remaining balance.
The board has already sanctioned a phased restructuring of the balance sheet aimed at erasing the negative earnings position recorded at Sh7.06 billion as of December 31, 2025. In the first phase, the insurer plans a court-approved reduction of its entire Sh4.66 billion share premium account.
The proposal now requires approval from shareholders at the upcoming annual general meeting, alongside regulatory consent from the Capital Markets Authority and authorisation by the High Court. The company has stressed that the exercise will not affect cash flow or shareholders’ equity in practical terms.
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Old Mutual Holdings, a subsidiary of South Africa’s Old Mutual Limited, emerged after the 2020 acquisition of UAP Holdings and the subsequent merger of operations in Kenya. The combined entity had been loss-making from 2020 until it returned to profitability in 2025, leaving it with significant accumulated losses.
While the insurer has not yet detailed the second phase of the restructuring, management says the plan is intended to strengthen the balance sheet, improve financial flexibility and support long-term value creation.
Chief Executive Officer Arthur Oginga described the initiative as part of a broader effort to stabilise the business and enhance shareholder returns.
Old Mutual is the second insurer this year to pursue a similar strategy. Britam Holdings recently secured shareholder approval to use its share premium account to offset accumulated losses, continuing a wider industry trend of balance sheet repairs aimed at restoring dividend capacity.
