Old Mutual Holdings PLC has moved to the High Court of Kenya seeking confirmation of a shareholder-approved reduction of its share premium account as the company continues with a phased balance sheet restructuring aimed at addressing accumulated losses.
The company filed an Originating Motion dated 30 July 2026 at the High Court of Kenya in Nairobi, Commercial and Tax Division, under HCCOMMISC. No. EB66 of 2026.
The application seeks court approval and confirmation of a special resolution passed by Old Mutual Holdings shareholders on 30 June 2026 to reduce the company’s share premium account. The application is scheduled for hearing on 15 October 2026 at 9:00am or soon thereafter.
In a notice to creditors, Old Mutual Holdings said service of the application was ordered to be effected through advertisement. The company stated that a copy of the application could be obtained from the court file.
Old Mutual Share Premium Reduction
The proposed transaction involves the reduction of Old Mutual Holdings’ share premium account by KSh4.664801 billion. The amount is intended to be applied against accumulated retained losses recorded on the company’s balance sheet.
Old Mutual Holdings had accumulated retained losses of KSh7.06404 billion as at 31 December 2025. If the proposed reduction is confirmed, the remaining accumulated losses would be approximately KSh2.399239 billion.
The restructuring is a non-cash accounting exercise. It does not involve a payment to shareholders, a reduction in the number of shares held, or a change in shareholders’ proportionate ownership. The company has also stated that the transaction does not affect its operations, liquidity, cash flows or underlying business performance.
Shareholders Approved Restructuring on 30 June
Old Mutual Holdings shareholders approved the share premium reduction through a special resolution at the company’s 18th Annual General Meeting held on 30 June 2026. The approval followed a Board decision of 29 May 2026 to commence a phased balance sheet restructuring designed to address the company’s accumulated negative retained earnings.
The first phase involves transferring the KSh4.664801 billion share premium balance to accumulated losses. The company previously disclosed that further balance sheet measures could be considered in a subsequent phase to address the remaining deficit.
Why Old Mutual Is Restructuring Its Balance Sheet
The restructuring follows Old Mutual Holdings’ return to profitability. For the financial year ended 31 December 2025, the company reported profit after tax of KSh856 million, compared with KSh838 million in 2024.
However, the accumulated historical losses remained on the balance sheet despite the recent profitable periods.
Under Kenya’s Companies Act, a company may make a distribution only out of profits available for that purpose. The Act defines profits available for distribution by taking accumulated realised profits and deducting accumulated realised losses, subject to losses previously written off through a lawful reduction or reorganisation of capital.
The balance sheet restructuring therefore seeks to reduce the historical loss position through a legally approved capital reorganisation.
High Court Confirmation Required
The Companies Act, 2015 provides a court-supervised process for reductions of share capital. Under Section 407, a company with share capital may reduce its share capital by special resolution. Section 408 provides that, after passing such a resolution, the company is required to apply to the court for an order confirming the reduction.
The court process also provides protections for creditors. Under Section 409, creditors meeting the statutory requirements are entitled to object to a proposed reduction. Section 410 provides that the court may confirm a reduction subject to appropriate terms and conditions and may not confirm it unless it is satisfied that the relevant creditors have consented, been paid, or had their claims secured. K Kenya Law Old Mutual’s advertisement to creditors forms part of this court process.
October Hearing To Determine Next Stage
The High Court hearing on 15 October 2026 will consider Old Mutual Holdings’ application for confirmation of the shareholder-approved reduction.
The proposed reduction will not take effect merely because shareholders approved the special resolution. Under Section 411 of the Companies Act, a court order confirming the reduction and the required statement of capital must be registered, after which the resolution takes effect in accordance with the Act.
The October proceedings will therefore form the next legal stage in Old Mutual Holdings’ balance sheet restructuring.
Old Mutual Dividend Position
The restructuring is linked to Old Mutual Holdings’ stated objective of rebuilding distributable reserves and restoring its capacity to pay dividends.
The proposed KSh4.664801 billion reduction would substantially reduce the company’s accumulated loss position from KSh7.06404 billion to approximately KSh2.399239 billion.
The transaction itself, however, is not a dividend payment or cash distribution to shareholders. Any future dividend would remain subject to the company’s financial position and the applicable requirements governing distributions. The Companies Act requires distributions to be made only from profits available for that purpose and imposes additional net-asset requirements on public companies.
The High Court confirmation is therefore a key outstanding step in the first phase of Old Mutual Holdings’ balance sheet restructuring.