KenolKobil buyout frozen again over Sh240 million debt

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The orders were granted by High Court Judge Margaret Muigai, in an urgent application filed by Delina Enterprises Kenya, arguing that the firm [Rubis Energie] may leave the country without paying the debt.
Delina was directed to provide the court with detailed evidence of the debt and demonstrate how the proposed takeover transaction will affect KenolKobil’s ability to settle the debt if found due and owing.

The planned Sh35 billion takeover of listed oil marketer KenolKobil #ticker:KENO hangs in the balance after a creditor obtained a court order to stop the process unless a Sh240 million debt is settled.

The orders were granted by High Court Judge Margaret Muigai, in an urgent application filed by Delina Enterprises Kenya, arguing that the firm [Rubis Energie] may leave the country without paying the debt.

“Temporary injunction is hereby issued to KenolKobil and its agents, stopping the completion of the takeover transaction by shareholders voting on the offer,” ruled Justice Muigai.

The present application by a creditor trying to secure his position is significant as it may open a floodgate of other applications by similarly aggrieved parties.

Delina was directed to provide the court with detailed evidence of the debt and demonstrate how the proposed takeover transaction will affect KenolKobil’s ability to settle the debt if found due and owing.

Last October, the oil marketing company commenced the process of selling its entire stock to French company Rubis Energie. Once complete, it is expected that KenolKobil will delist its shares from the Nairobi Securities Exchange, (NSE) effectively ceasing to be a public company.

“KenolKobil has not fully published or informed the public of the full particulars of the intended takeover, and in particular the manner in which it intends to deal with its liabilities and pending claims,” lawyer Edward Wangila said in court papers.

Further, Delina said it believes KenolKobil holds no other property except what it currently seeks to transfer to Rubis Energie. KenolKobil was directed to respond to the application which will be heard on February 14, four days to the close of its buyout offer.

Delina said it was apprehensive that KenolKobil may be taking steps to avoid its debts and that there is a likelihood that the money may not be paid even with a court order once the company leaves Kenya.

The move came days after KenolKobil was directed to deposit Sh101.7 million claimed by five former employees, including ex-executive Patrick Kondo, into an escrow account.

The court order lifted an injunction by Mr Kondo that stopped the buyout.

The claims by the ex-staff include Sh26.8 million by Mr Kondo, Sh47.4 million by Mr Kenneth Ndumbi, Sh19.4 million by Mary Mwangi, Sh6.3 million by Jane Wambua and Sh1.7 million by Caroline Murimi.