Comarco Group, which operates a private port in Mombasa, is seeking to restructure $29.1 million (Sh3 billion) loans it took from DTB #ticker:DTK, NCBA #ticker:NIC and I&M Bank #ticker:I&M.
The Kenyan lenders issued a series of dollar-denominated loans to the marine logistics firm, some of which have not been repaid.
A portion of I&M loans were due as early as 2016 while NCBA, the successor of the former NIC Bank, has been expecting some repayments since 2018. Some of DTB’s loans first fell due in September this year.
Comarco has revealed details of its debt profile in disclosures arising from its bid to go public by acquiring London Stock Exchange-listed Anglo Africa Agriculture (AAA) Plc in a Sh3.6 billion cash-and-stock deal.
“Comarco Group’s financial performance is reliant on the successful restructuring of its current debt facility,” AAA said in a communication to its shareholders. “A large portion of this debt balance is held between three Kenyan banks; Diamond Trust Bank, NIC (now NCBA), and I & M Bank. Comarco Group holds loans with these banks, some of which have reached their loan maturity dates.”
DTB, which lent a total of $17 million (Sh1.7 billion), priced its loans at 7.5 percent while I&M is earning 6.82 percent on its $11 million (Sh1.1 billion) loans.
The I & M loans also attract penalty interest at an additional 10 percent on overdue amounts.
NCBA provided a total of $1.1 million (Sh113 million) a rate of nine percent. Comarco and the three banks are close to completing the debt restructure which is contingent on the completion of the reverse takeover of AAA besides additional capital injection. The merged entity expects to raise up to $21 million (Sh2.1 billion) from sale of shares, with part of the proceeds to be used in settling a portion of the loans. In the event that the acquisition and fundraising fail, the debt restructure will be uncertain and Comarco will be looking at paying loans of $11 million (Sh1.1 billion) within 12 months.
“In the absence of alternative funding, this would have a material impact on Comarco Group’s ability to continue to trade,” the company said.
The logistics firm’s net losses widened to Sh354 million in the six months ended March compared to Sh297 million the year before. The performance was driven by higher costs and lower sales. Its turnover fell to Sh303 million from Sh353 million.