Summary
- The cables manufacturer says the maturity date of the loan has been postponed and the collateral changed, without giving further details.
- SBM is among the banks that had taken measures to recover their loans on which the firm had defaulted due to a mix of losses and sales decline in the past five years.
- Ecobank Kenya in February appointed a receiver manager to take over certain assets of the cables manufacturer, which had stopped servicing a Sh161 million loan from the lender.
East African Cables has reached a loan
restructure agreement with SBM Bank Kenya, a move that has seen the
lender retreat from its move to liquidate the Nairobi Securities
Exchange-listed firm over a Sh285 million debt.
The
cables manufacturer says the maturity date of the loan has been
postponed and the collateral changed, without giving further details.
“East
African Cables Plc is pleased to announce that the company has reached a
debt settlement and restructure agreement with SBM Bank Kenya Limited
resulting in withdrawal of the liquidation petition against the
company,” EA Cables said in a statement.
“The agreement
involves a restructure of the outstanding facilities by the bank under a
new long-term facility and security arrangement.”
SBM
is among the banks that had taken measures to recover their loans on
which the firm had defaulted due to a mix of losses and sales decline in
the past five years.
Ecobank Kenya in February appointed a receiver manager to take
over certain assets of the cables manufacturer, which had stopped
servicing a Sh161 million loan from the lender.
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 taken over by the receiver was not immediately
clear. EA Cables is part of a group of companies owned by investment
firm TransCentury
and which have struggled to pay various creditors including bondholders and banks.
The
cable manufacturer’s biggest lenders, the Kenyan and Tanzanian branches
of Standard Bank Plc, last year agreed to take a haircut of Sh1.56
billion and were paid Sh1.6 billion as final settlement.
EA Cables took new loans from Equity Bank
and used the amounts to pay off StanChart .
The firm had also disclosed that it was negotiating with Equity Bank to
also settle the remaining claims by SBM and Ecobank but the talks have
stalled.
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