Britam Holdings PLC on Monday proposed a Sh5.88 billion reduction in its share premium account to offset accumulated losses and pave the way for future dividend payments.
The firm also planned to expand its employee share ownership plan from 2% to 5%. Both moves are non-dilutive and subject to regulatory, court, and shareholder approvals.
In a public announcement dated March 30, 2026, the company said its board had unanimously resolved to recommend the proposal to shareholders for approval at the next Annual General Meeting (AGM).
The proposed reduction would see the share premium decrease from Sh13.24 billion to Sh7.36 billion.
According to the company, the Sh5.88 billion reduction will be applied directly to offset accumulated losses, which stood at the same amount as of December 31, 2025.
“If the proposed Share Premium Reduction becomes effective, it would enable the Company to create distributable reserves to support (i) the future payment of dividends to shareholders should circumstances make it appropriate or desirable to do so and (ii) other corporate purposes of the business,” the statement said.
The board emphasised that the move is largely an accounting adjustment and would not affect shareholders’ ownership.
“The proposed Share Premium Reduction will not result in any change in the shareholding of the Company,” it said, adding that investors would continue to hold the same number and type of shares they own prior to completion.
The company also sought to reassure investors about its financial stability, noting that the reduction would not weaken its balance sheet.
“The total equity and net assets of the Company will not be negatively affected by the proposed Share Premium Reduction,” the board stated.
It further explained that the adjustment would simply realign accounts by reducing the share premium while eliminating accumulated losses, leaving the overall financial position intact.
“This means the Company’s strong financial position remains unaffected,” the announcement added.
However, the proposal remains subject to several regulatory and legal approvals. These include clearance from the Capital Markets Authority, approval by shareholders through a special resolution, confirmation by the High Court of Kenya, and registration of the court order at the Companies Registry.
The company indicated that additional details would be shared in a shareholders’ circular once regulatory approval is obtained.
Alongside the share premium reduction, Britam also announced plans to expand its Employee Share Ownership Plan (ESOP), increasing the allocation from 2% to 5% of the company’s issued share capital.
The board said the move is intended to enhance employee participation in the company’s ownership structure, while maintaining shareholder value.
“The proposed increment of the allocation to the ESOP would not result in an increase in the share capital of the Company or issue of additional shares,” the statement noted.
Instead, shares allocated under the ESOP will be acquired through purchases on the open market via the Nairobi Securities Exchange.
This approach ensures that the plan remains non-dilutive, meaning existing shareholders’ stakes will not be diluted.
The ESOP expansion is also subject to regulatory and shareholder approvals, including consent from the Capital Markets Authority and a special resolution at the AGM.
Additionally, revisions to the ESOP Trust Deed and Rules must be approved before implementation.
The company said the initiative builds on its existing ESOP framework, which was first registered following regulatory approval in September 2017.
Britam’s dual proposals reflect a broader strategy to strengthen its financial flexibility while aligning employee incentives with long-term corporate performance.
By addressing accumulated losses and creating distributable reserves, the firm is positioning itself for potential dividend payouts in the future, while also enhancing internal ownership through the ESOP programme.
The announcement comes at a time when companies are increasingly seeking to optimise capital structures and improve shareholder returns amid evolving market conditions.
For Britam, the success of the proposals will depend on securing the necessary approvals and shareholder backing at the upcoming AGM, where investors will have the final say on the company’s financial restructuring plans.
