Discussions are ongoing on the next course of action to revive the fortunes of the logistics firm that has posted losses for the fourth straight year.
Those aware of the talks say the firm is also engaging Capital Markets Authority (CMA) on the recovery path to be taken, including raising fresh funds.
The board of Express Kenya #ticker:XPRS is seeking a fresh route to resolve the company’s cash crunch following CEO Hector Diniz’s failed bid to buy out the company.
Express chairman Chris Obura on Thursday told the Business Daily that discussions are ongoing on the next course of action to revive the fortunes of the logistics firm that has posted losses for the fourth straight year.
“Discussions are going on. That will be announced in the newspapers once the decision is finalised,” said Dr Obura.
Those aware of the talks said the firm is also engaging Capital Markets Authority (CMA) on the recovery path to be taken, including raising fresh funds. However, Dr Obura declined to comment on the issue.
The firm is under pressure to spell out a recovery plan. In the latest annual report, Mr Diniz said banks had been reluctant to finance its real estate division due to losses and eroded goodwill.
“The inadequate working capital situation has led to the CMA writing several letters to the company and holding several meetings on the subject matter while seeking to find a lasting solution that will rescue the company from the doldrums of despair,” said the CEO.
On Tuesday, Mr Diniz, who owns a 61.64 per cent stake in the company, announced the flop of the buyout deal after receiving the backing of shareholders with a 9.78 per cent interest.
The outcome has left the firm in a complicated recovery situation given that it is choking in Sh62.34 million short-term debts and eroded confidence from banks.
Faida Investment Bank, which was the financial adviser in the failed deal, said in its report a bank was willing to finance the 248 residential flats project.
However, it demanded an upfront deposit of more than Sh140 million, a proof of ability to finance interest costs and further evidence of at least 20 per cent presales of the apartment.
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