A receiver appointed to take over the management of certain assets of East African Cables has ended his mandate after the Nairobi Securities Exchange-listed firm reached an agreement with Ecobank Kenya Limited whose Sh188 million it had failed to pay.
Ecobank advanced the cash to the company through debentures –an agreement in which the borrower pledges several assets to the creditor as collateral. The value of the assets that had been taken over by the receiver was not immediately clear.
“Take notice that I, Kereto Marima … give notice that I ceased to act as receiver over specific assets of East African Cables Limited, with effect from October 1, 2020,” the official receiver said in a Kenya Gazette notice. The company has restructured a total of Sh498 million worth of loans from SBM Bank Kenya and Ecobank Kenya, sparing the manufacturer liquidation and asset seizure.
The cables manufacturer had failed to settle the loans when they fell due, prompting SBM to seek a liquidation of the company while Ecobank sought to protect its interest by hiving off some of the cable manufacturer’s assets.
The parties subsequently reached an agreement to convert the overdue credit facilities into long-term loans at an interest rate of 13 percent, according to disclosures in the cable manufacturer’s latest annual report.
“After year end, the company signed a facility agreement with SBM Bank Kenya Limited to restructure the outstanding balance (Sh310 million) to a tenor of ten (10) years effective April 2020,” the company says in the report.
“A similar loan facility was signed with Ecobank Kenya Limited in June 2020 resulting to restructure of the outstanding debt balance (Sh188 million) to a tenor of six (6) years with effect from July 2020.”