Auctioneers hammer. PHOTO | FILE East Africa Portland Cement Company has surrendered to KCB Bank a parcel of land that was used to secure a Sh3.3 billion loan from the lender as it seeks to stop a looming auction.
The cash-strapped cement company has been struggling to find a buyer for 2,076 acres of land in Mavoko, Machakos County, which its shareholders voted to sell in September 2019.
The land was to be sold for about Sh5.4 billion to settle the debt – which has since ballooned to Sh6.6 billion. The loan attracts Sh600 million in interest annually.
Interestingly, the property was on sale for Sh4.8 million per acre – a steep discount from an average of Sh14.8 million per acre in Athi River, according to the Hass Land Price Index. First priority
After running out of patience, KCB reportedly threatened to auction off the company, forcing it to surrender 745 acres for disposal.
The parcel is a part of about 12,000 acres of land that EAPCC holds.
The bank, which has appointed Tysons Limited and Antidote Agencies to dispose of the property, said the first priority in purchase will be given to the occupants of the land.
The land is presently occupied by squatters who arrived in 2010 after EAPCC announced plans to sell off the land after exhausting its mining operations.
EAPCC, the producer of Blue Triangle cement and one of Kenya’s largest cement manufacturers , was founded in 1933 as a cement exporting business.
In 1956, the company started its first manufacturing plant in Athi River.
EAPCC had for a long time held the second place with a 25% control after Bamburi Cement but was dislodged by Mombasa Cement due to a financial turbulence that started in 2015 as a result of board room wars over company ownership.