Barclays seeks to sell oil dealer’s Coast plot in Sh330m suit
A Barclays Bank branch on Muindi Mbingu Street in Nairobi. PHOTO | FILE
What you need to know:
The lender has since 2006 been battling to recover the sum, and last year issued sale notices to Mafuta Products and appointed Garam Investments Auctioneers to begin the auction.
Barclays Bank is seeking to sell a piece of land in Mombasa owned by a petroleum dealer, Mafuta Products, to recover a Sh330 million loan extended to the company in 2001.
The lender has since 2006 been battling to recover the sum, and last year issued sale notices to Mafuta Products and appointed Garam Investments Auctioneers to begin the auction.
Mafuta Products has, however, obtained a temporary court order barring Barclays from selling the land until its suit has been determined.
The lender yesterday agreed in court that it has allowed Mafuta Products two weeks to sign a sale agreement with a prospective buyer from the United Arab Emirates and pay a deposit to avoid auctioning of the prime property in Mtwapa, Mombasa.
Mafuta Products claims in court papers that Barclays reneged on an out-of-court deal that allowed it to source for a buyer when the lender advertised the property for sale.
The oil dealer will also have to furnish Barclays with a copy of the sale agreement. The deposit paid for the land is to be remitted to Barclays directly from the buyer. Failure to meet the terms of the deal would see the parties return to court.
“Following various meetings and engagements with Barclays Bank, Mafuta Products have been able to identify a prospective purchaser who has made proposals to purchase and jointly develop the suit property with Mohamed Ali Motha (a director of Mafuta) and in the process redeem the outstanding loan due to Barclays Bank,” Mafuta says in court filings.
But Barclays says in a response to the suit that Mafuta has since 2006 filed several suits, and is attempting to use the judicial process to delay recovery of the Sh330 million loan.
The lender adds that Mafuta Products has failed to honour other repayment plans that were adjusted over the years to allow it finish the loan.
Mafuta, however, says it had secured a buyer in 2014, who paid a Sh46 million deposit that was given to Barclays.
The buyer failed to finish paying the agreed purchase price, but Barclays retained the Sh46 million.
The lender adds that Mafuta has never sent Barclays a copy of the agreement for the joint development venture with the foreign investor to prove that indeed there are plans to offset the loan.
“Mr Motha promised to furnish a memorandum of understanding with respect to the joint venture. As of the time of making this affidavit, not a single document evidencing the proposed joint venture has been furnished to Barclays,” the lender says in its response.
There are two other suits filed over the loan facilities Barclays advanced to Mafuta Products, one in Nairobi and the other in Mombasa.
Lady Justice Grace Nzioka will on February 6 mention the suit Mafuta filed last year to confirm whether a deposit has been made to Barclays and give directions afterwards.
