This archive report was first published on 5 September 2019.
Published on September 5, 2019, 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.
This decision, reached during a consensus meeting on Tuesday, serves as a vote of confidence for the capital-choked bank, helping to de-congest its loan amortization plan in line with the ongoing debt restructuring quest.
Earlier in July, Consolidated Bank had sought an unspecified sum in government bail to meet its commitment to the note holders, which was previously due on July 22.
The Treasury subsequently granted the lender its assisting hand, averting an imminent default that 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.
As a majority-owned State-owned lender, with the government holding 86 percent of its shares, Consolidated Bank has been on a run of bond issuance to stay afloat, despite its capital position remaining significantly below the Central Bank's prescribed threshold of Ksh.1 billion.
The bank had initially 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.
Consolidated Bank remains stuck to its genesis of 1989, emerging from a consolidation of nine previously cash-strapped firms.
