Portland surrenders land to stop KCB Sh5b debt auction
Loss-making East Africa Portland Cement Company (EAPCC) has surrendered part of its vast parcel of land to KCB Bank to avert the auctioneer hammer over an outstanding Sh5.4 billion loan.
The outstanding loan is estimated to have ballooned to Sh6 billion because of rising interest and penalties.
An official, who requested anonymity, said the cement maker handed over the land to the lender through a commercial court recently.
Shareholders voted to sell it at an extraordinary general meeting in September 2019 to rescue it from insolvency after years of mismanagement.
The then acting Managing Director Stephen Nthei said the company and KCB were actively involved in the process of identifying a buyer for the land in Mavoko, Machakos County.
“We are at the stage of identifying a buyer and we have discussed with the lender.
This is because we are both in it as beneficiaries since EAPCC is in search of working capital while KCB is keen on having their accounts serviced,” he said in an interview before his exit from the company.
Nthei, who was at loggerheads with a section of board members, has since resigned. He was replaced through an advertisement in local dailies, which saw Daniel Kiprono become acting managing director.
KCB Bank had been holding a title deed for a 745 acres parcel of land in Mavoko as collateral for debt, which has been accruing Sh600 million as interest, annually.
Land Commission
Business Hub has since learnt that KCB has paid stamp duty for the transfer of the land to initiate the process of selling it to recover its money within 24 months since the transfer.
However, the sale process is expected to open more court battles amid concerns about how it will take place since the land is currently occupied by squatters.
Environment and Lands Court in Machakos last week ruled that EAPCC had acquired the 22 parcels of land illegally, and as recommended by the Ndung’u Land Commission report, the lease of the parcels of land, which the cement maker was using to mine raw materials had already expired.
The cement maker went to court to oppose the Ndung’u report but lost in a ruling.
This is after the court questioned why EAPCC had failed to petition the Ndung’u report and only opted to do so recently.
“It is common knowledge that the Ndung’u commission report has been in public domain since 2004.
It is common knowledge that some of the recommendations in the Ndung’u commission have been acted upon by several State and non-State organs.
The petitioner has not informed this court why despite the report having been released to the public in 2004, the same complainant has never challenged it,” said Justice Oscar Angote.
The valuation of the prime piece of land which borders the busy Nairobi-Mombasa road is also a matter of interest. Attempts to get EAPCC management’s comment on the matter failed to bear fruit.
