According to Business Daily Africa, the NCBA Group has put manufacturing company; Kaluworks Limited under receivership as a result of the non payment of a 40 million United States Dollars (4.31 Billion Kenyan Shillings) debt.
The NCBA Group has subsequently appointed a receiver manager to help it turn around the company which was part of Comcraft Group owned by billionaire; Manu Chandaria, and also protect its assets in its bid to recover its multi billion Kenyan Shilling debt.
Kaluworks which is one of the biggest manufacturers of roofing sheets and aluminum utensils in Kenya has reportedly been going through financial difficulties in the last couple of years as a result of increased competition from other manufacturers of cookware and low sales.
The NCBA Group has brought on Receiver Manager; Pongangipalli Rao for the Kaluworks company. The situation is seen by some as a very rare downtime in the career of industrial tycoon; Manu Chandaria, who is also the Chairman of Comcraft.
Mr. Pongangipalli Rao in a Kenya Gazette notice made it known that, “Notice is given that the above company (Kaluworks) was placed under administration on May 27, 2021 by the holder of a qualifying floating charge.”
The receivership is taking place a couple of months after numerous lenders which include I&M Bank looked for debt collectors and auctioneers to help in the auctioning of multimillion dollar properties like commercial complexes and residential complexes both of which had been utilized in the guaranteeing of loans for Kaluworks after the company was unable to honour its obligation.
Kaluworks is also reportedly owing another major bank the sum of 40 million US Dollars (around 4.31 billion Kenyan Shillings), along with hundreds of millions of Kenyan Shillings in a commercial paper that also had its repayments defaulted on.
Kaluworks Limited. www.kaluworks.com
The Group Managing Director of NCBA; John Gachora, reportedly refused to make any comment regarding the bank’s plan for Kaluworks.
According to Business Daily Africa Mr. John Gachora words were, “Please refer all questions to the administrator.”
Kaluworks first began operations majorly as a cookware manufacturer before then diversifying into aluminum rolled products in 1988 via its setting up of a state-of-the-Art aluminum rolling plant in Mariakani which is quite close Mombasa. Among its assets at the plant were a continuous caster, a foundry, “other finishing equipment”, along with a cold rolling mill.
Kaluworks is a subsidiary of Clovis Company Limited which is an investment holding registered in Bermuda and owned by the Comcraft Group whose controlling shareholder and chairman is Chandaria.
Mr. Manu Chandaria who is one of the leading philanthropists in Kenya, had in the past kept some form of distance between operations at Kaluworks and himself.
According to Business Daily Africa Bankers made it known that the links between Billionaire; Chandaria and Kaluworks provided the extra comfort they needed to make the multi billion Kenyan Shilling loan available for the manufacturing company.
The official Kaluworks website revealed that the company was created in 1929.
Billionaire; Manu Chandaria’s father who was an immigrant from India set up the foundation for the Comcraft Group in 1915 when he relocated to Kenyan capital; Nairobi to set up a provisions shop on Biashara street in Nairobi.
As the business increased Chandaria’s father along with members of the extended family acquired Kaluworks.
Manu Chandaria joined the company upon his return to Kenya after studying in the United States. He then guided the company to an impressive growth and increased its product offerings.
Comcraft, currently has operations in more than 40 countries with Forbes which is a business publication in the United States, putting the estimated worth of the company at 2.5 billion United States Dollars (around 215.6 billion Kenyan Shillings) as at 2011. 2011 was the last time it carried out a valuation of Comcraft.
In the same year; 2011 Billionaire Mr, Chandaria was on the Forbes 40 Richest Africans list, making him one of the wealthiest businessmen in Kenya.
By 2012, Kaluworks was able to raise 14 million United States Dollars (around 1.5 billion Kenyan Shillings) via a corporate bond sale.
Kaluworks has been listed by Sanlam Kenya as one of the defaulters of a commercial paper it had invested in. Sanlam Kenya then had to write off 1.15 billion Kenyan Shillings which was mainly tied to investments with companies that had fallen into financial difficulties.
The Group Executive Officer of Sanlam Kenya; Patrick Tumbo is quoted as saying, “For Kaluworks, who thought that Manu Chandaria could default on a commercial paper?”
According to Business Daily Africa, Comcraft Group which is a family owned conglomerate had goals of taking portions of its business, public. This move would have been further proof of its increase in size and subsequent need for capital as it continues its expansion globally.
The Billionaire had made it known earlier on that some parts of its business might merge ahead of its Initial Public Offering (IPO). The Initial Public Offering (IPO) could end up becoming one of the largest in Kenya if the company decides to get listed on the Nairobi bourse.
NCBA Group’s decision with regards to Kaluworks is coming at a time when a number of banks who had slowed down on the seizing of properties in 2020 due to the still ongoing Coronavirus pandemic have increased the efforts towards recovering debts so as to effectively clean up their loan books.
This has in turn, resulted in a significant increase in the number of auctions happening in recent times.
According to the Central Bank of Kenya (CBK) the loans which have been defaulted on are for the most part in the manufacturing sector, the agriculture sector, and the real estate. This is of course excluding the loans which have been listed under household and personal.
Kaluworks, was however encountering financial distress before the Coronavirus pandemic hit. The still ongoing Coronavirus pandemic has been responsible for numerous company closures as well as layoffs all over the world.
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