A signage outside Ecobank branch in Nyeri town. The bank has appointed a receiver manager to take over certain assets of East African Cables. FILE PHOTO | NMG Ecobank Kenya Limited has appointed a receiver manager to take over certain assets of East African Cables #ticker:CABL that has defaulted on a Sh161 million loan from the lender.
A notice in the latest Kenya Gazette says that the lender appointed Kereto Marima to take custody of the cables manufacturer’s plant and machinery effective January 31, 2020.
Ecobank advanced the cash to the Nairobi Securities Exchange-listed firm through debentures –an agreement in which the borrower pledges several assets to the creditor as collateral.
“All matters to do with the specific assets captured by the debentures dated December 7, 2011, dated July 30, 2013 and March 11, 2015, collectively known as the debentures, shall be dealt with by the receiver,” reads part of the notice.
The notice was signed by the receiver manager on February 10, 2020. The value of the assets taken over by the receiver was not immediately clear.
EA Cables, however, says in its latest available annual report that it has pledged all its assets to various banks.
“East African Cables Limited (Kenya) has entered into facility arrangements with banks and the borrowings are secured by certain land and buildings for Sh2 billion … and debentures over all assets of the company for Sh3.2 billion,” the company says in its 2018 annual report.
This is the latest enforcement action by EA Cable’s creditors. SBM Bank (Kenya) Limited also recently sought court orders to liquidate the debt-laden firm.
EA Cables is part of a group of companies owned by investment firm TransCentury #ticker:TCL and which have struggled to pay various creditors including bondholders and banks.
The cable manufacturer’s biggest lenders, the Kenyan and Tanzanian branches of Standard Bank Plc #ticker:SCBK, last year agreed to take a haircut of Sh1.56 billion and were paid Sh1.6 billion as final settlement.
EA Cables took new loans from Equity Bank and used the amounts to pay off StanChart. The company had also disclosed that it was negotiating with Equity Bank to also settle the remaining claims by SBM (Sh285 million) and Ecobank Kenya (Sh161 million).The actions by Ecobank and SBM suggest that the cables manufacturer has been unable to restructure the remaining loans. Prior to taking over the loans from its rivals, Equity Bank had already lent more than Sh2 billion to EA Cables.The […]