Letshego has denied media reports that it has defaulted on loans in Kenya and Uganda. According to Kenyan publication Business Daily, the lender had defaulted on a 3.9 billion Kenyan shillings ($30.5 million) loan for its Kenya and Uganda subsidiaries.
Business Daily also alleges that Letshego cut 142 jobs in the two markets as it plotted an exit from the region due to deteriorating economic conditions. The default was part of a 27.17 billion Kenyan shillings ($211 million) debt that the company failed to pay as it recorded an $11 million loss per its latest annual results.
However, Letshego has refuted the reports about the default but did not comment on the job cuts.
"Letshego Africa Holdings affirms that the Group has not defaulted nor failed in the servicing of any of its obligations in any of its subsidiaries. We confirm that claims of default on the part of Letshego Kenya and Uganda are false and incorrect," the company told shareholders.
"The Group’s Annual Results for 2023, first published on 22 March 2024, affirmed that the Group’s Expected Credit Loss (ECL) methodology had been adjusted, impacting 2023 results and resulting in the restatement of 2022 financial results. As a result of these adjustments and other areas of judgement, the Group breached some covenants with some of its funders which are disclosed fully in our Integrated Annual Report for 2023."
"Beyond the covenant breaches, the Group has not failed on its debt obligations. For the two subsidiaries falsely and incorrectly mentioned by the media house, we wish to confirm that we did proactively engage with our funders and obtained formal ‘letters of no action’ for the covenant breaches."
"Letshego Africa Holdings remains well-capitalised and in a solid liquidity position."
Image source: Sunday Standard