East African Cables finally restructures $2.85m debt

East African Cables finally restructures $2.85m debt

The East African Cables manufacturing plant in Nairobi. The company has been making losses for the past four years. FILE PHOTO | NMG The agreement involves a restructure of the outstanding facilities by the bank under a new long term facility.

EA Cables is grappling with a huge debt portfolio amounting to Ksh3.55 billion ($35.5 million), which has eroded cash flows pushing the firm into a negative working capital position of Ksh3.27 billion ($32.7 million).

According to the firm’s 2018 annual report, it owed banks a total of Ksh3.55 billion ($35.5 million) as at December 31, 2018, of which Ksh2.56 billion ($25.6 million) was borrowed from Standard Chartered Bank Kenya and $5.32 million from Standard Chartered Bank Tanzania.

East African Cables has reached an agreement with the State Bank of Mauritius (SBM) over the restructuring of Ksh285 million ($2.85 million) debt that is due and payment on demand, giving the company a lifeline in its recovery efforts.

The agreement means the lender withdraws a liquidation petition against the firm, a Nairobi Securities Exchange-listed firm that has been making losses since 2015.

“The agreement involves a restructure of the outstanding facilities by the bank under a new long term facility and security arrangement,” said company secretary Virginia Ndunge in a public notice last week.

“The withdrawal of the petition is a significant step towards the company’s turnaround plan that includes strengthening of the balance sheet, operational improvement and having the right funding structure for growth and profitability.”

Debt portfolio

In January 2020, the firm announced that the board had been in discussion with all the lenders.

EA Cables is grappling with a huge debt portfolio amounting to Ksh3.55 billion ($35.5 million), which has eroded cash flows pushing the firm into a negative working capital position of Ksh3.27 billion ($32.7 million).

According to the firm’s 2018 annual report, it owed banks a total of Ksh3.55 billion ($35.5 million) as at December 31, 2018, of which Ksh2.56 billion ($25.6 million) was borrowed from Standard Chartered Bank Kenya and $5.32 million from Standard Chartered Bank Tanzania.Other loans included Ksh161.52 million ($1.61 million) from Ecobank Kenya Ksh285.01 million ($2.85 million) from SBM and Ksh3.82 million ($38,200) from Credit Bank Kenya Ltd.According to the report, out of the Ksh3.55 billion ($35.5 million) that was due for repayment on December 31, 2018, loans amounting to Ksh1.6 billion ($16 million) relating to Standard Chartered Bank Kenya and Standard Chartered Bank Tanzania were […]

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