UK logistics firm Atlas closes Kenya subsidiaries, shifts focus to Ethiopia

Atlas Development and Support Services Limited CEO Carl Esprey. He has said the UK company has closed down its operations in Kenya and moved to Ethiopia. FILE PHOTO | SALATON NJAU | NATION MEDIA GROUP 

In Summary

• Atlas said that it had faced “increasing creditor pressure” resulting from failure by some of its clients to settle debts.
• Atlas owned three subsidiaries in Kenya, Ardan Logistics Kenya Limited, Ardan (Medical Services) Limited, and Ardan (Civil Engineering).
• During the year ending June 30, Atlas reported a net loss of Sh1 billion, mainly attributed to cancelled and lack of new logistics service contracts.
• The loss making firm incurred Sh147 million in finance costs in the year to June 30.

Atlas Development & Support Services Limited, a UK logistics company that is listed at the Nairobi Securities Exchange, has announced the closure of its Kenyan subsidiaries.

This comes at a time when its fortunes have been dwindling as a result of a downturn in the oil and gas exploration sector where its operations were mainly focused.

In a statement, Atlas said that it had faced “increasing creditor pressure” resulting from failure by some of its clients to settle debts and as a result decided to close its Kenyan operations and focus all of the company’s administrative functions and activities to Ethiopia.

“We have taken steps to place our Kenyan subsidiaries into formal liquidation proceedings.

"Since the downturn in the oil and gas market, we have found that clients are no longer placing a premium on our high quality services and are demanding terms which are not economically viable,” said Atlas’ chief executive Carl Esprey.

KENYAN SUBSIDIARIES

Atlas owned three subsidiaries in Kenya, Ardan Logistics Kenya Limited, Ardan (Medical Services) Limited, and Ardan (Civil Engineering).

The company said that it will remain listed at the NSE.

Atlas is also listed at the London Stock Exchange.

During the year ending June 30, Atlas reported a net loss of Sh1 billion, mainly attributed to cancelled and lack of new logistics service contracts for oil and gas companies operating in Kenya.

Last year, it reported a net loss of Sh147 million that was followed by a Sh609 million loss for the half year period to December 2014.

The loss making firm incurred Sh147 million in finance costs in the year to June 30 while its operating expenses increased to Sh1.2 billion from Sh262 million incurred in 2014.

Mid-November, Atlas announced a plan to acquire East Africa Packaging Holdings Limited, a company established to build a bottle manufacturing facility 45 kilometres north of Addis Ababa, Ethiopia.