East Africa: Cash-Strapped EA Cables to Delay Publishing Its 2019 Financial Results

East Africa: Cash-Strapped EA Cables to Delay Publishing Its 2019 Financial Results

Nairobi — Debt-ridden East African Cables has announced that there will be a delay in the publishing of the audited financial statement for the year ending December 31, 2019.

In a statement, the Group’s Company Secretary Virginia Ndunge said the firm has already obtained approval from the Capital Markets Authority granting it the extension.

Ndunge said the audited financial statements shall therefore be published no later than July 31.

The secretary said the delay has been occasioned by on-going discussions with the company’s lenders to complete the remaining portion of the debt restructure transaction.

As of 2018, the company’s debt had amounted to Sh3.55 billion, owed to different banks, among them SBM Bank Kenya, Ecobank Kenya, Standard Chartered Bank Kenya, and Standard Chartered Bank Tanzania.

"In addition, the social distancing measures and restricted working hours enforced by the government due to COVID-19 pandemic, have significantly affected the audit timelines," she said.

The results will hence be published about three months late. This is against CMA’s rules which expects all listed firms to publish their results within four months after the end of the financial year.

East African Cables is a subsidiary of TransCentury where TransCentury. The parent company had announced that debt restructuring would affect the company’s books as well as those of its subsidiary – East African Cables.

"The East Africa Cables has entered into a conditional transaction that may result in a material change in the company and therefore TransCentury Group capital structure and debt profile," TransCentury said in a cautionary note to investors.

This is the second time the first company that has sort approval from the regulator to delay publishing its financial results for the previous year.

Other companies that have been granted a similar extension by CMA include Crown Paints Kenya, Home Afrika, ARM Cement and Liberty Kenya Holdings."The justifications provided include ongoing capital raising process, delay in the consolidation of financial results of subsidiaries, sign-off of disclosures which form part of the financial and debt restructure transactions in subsidiary firms," CMA said.

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