The High Court has appointed the official receiver to manage debt-ridden transport and logistics firm-Multiple Hauliers EA Ltd and conclude a deal with an investor who has agreed to pump billions of shillings into the company.
In a ruling last week, Justice Alfred Mabeya appointed the official receiver to be the administrator of the company, after being informed that administrators appointed by NCBA Bank Kenya resigned in April.
The judge directed the official receiver to strictly oversee the completion of agreements between the company and a South African investor, and also oversee the smooth takeover by the investor by December 2024.
“In view of the foregoing and having in mind that there are only four months to the conclusion of the deal that would favour all the creditors, I am satisfied that this is a proper case to exercise the discretion in favour of extending the orders in force,” said the judge.
The court noted that three investors expressed interest in the logistics company and were willing to inject sufficient capital to help pay the creditors.
“From the record, one of the investors, Amava Group Capital (Pty) Ltd of South Africa has signed a term sheet with the company on 29/5/2024. The precondition to the term sheet is a guarantee of US $ 8.5 million,” noted the judge.
The judge said the official receiver should file his report in court and advise the creditors on the progress after every 60 days. His first report is to be ready on or before November 14, 2024, the court said.
When the parties appeared before court in April, the firm’s managing director Rajinder Singh Baryan pleaded for more time, stating that Multiple Hauliers had found investors willing to pump millions for the revival of the company.
Justice Mabeya noted that the firm was indebted to a tune of Sh14 billion with creditors including NCBA (Sh7.2 billion), Synergy Credit Limited (Sh532 million), KCB Bank Kenya and Co-operative Bank of Kenya (Sh1.2 billion) and National Social Security Fund (Sh6.9 million).
The judge said the route taken by the company to bring in a strategic investor who would inject substantial capital, will enable it to pay off a substantial part of the debt for both the secured and unsecured creditors.
Justice Mabeya observed that the negotiations took some time and seemed to be held only between the four big lenders and the company to the exclusion of the other creditors which raised serious concerns.
The court then directed that the other creditors be notified of the progress of the negotiations.
“All seemed to be well until April 2024 when, all of a sudden, the administrators resigned,” said the judge, noting that the four big lenders changed tune and stated that the negotiations were taking too long.
“With the foregoing in mind, the question is, should the company be given time to finalise the deal and realise the funds being injected and pay off some of the debts or should it be left to collapse?” the judge.
The court noted that if the orders are not extended, there would be chaotic dismantling of the company and some of the creditors will walk away with nothing.
