- The move follows an out-of-court settlement between NBK and PCEA Ruiru Parish Development Foundation.
- The lender is selling the land for Sh820 million.
- National Bank says the sale is a win-win outcome after church group fell back on its repayments.
The National Bank of Kenya (NBK) #ticker:NBK has taken over a 70-acre plot earlier owned by a church group to offset an outstanding loan.
The move follows an out-of-court settlement between NBK and PCEA Ruiru Parish Development Foundation.
The lender is selling the land for Sh820 million.
NBK chief executive Wilfred Musau on Monday said the NBK now owns the 70-acre parcel of land as ‘repayment’ for its loan but had retained PCEA Ruiru Parish Development Foundation as the sole selling agents.
“We agreed last year to slice off a portion of the suit land equivalent to the value of money owed to us and walked off. It is much easier than moving to court to lodge a claim that might take longer to conclude as well as raise costs that might eat into the land’s value. The deal was concluded last year and each party is happy,” he said.
The NBK in a notice Monday said the parcel of land had been subdivided into 268 quarter-acre plots with a reserved price of Sh3.2 million per plot for buyers seeking a minimum of four plots.
The NBK also invited individuals, real estate developers, saccos, investment groups, universities and hospitals to bid for the whole parcel.
The church group initially sought a Sh560 million loan to purchase the 202-acre coffee farm that it subsequently subdivided for sale to its members with a quarter acre plot going for Sh1.8 million, a half-acre (Sh3.5million) while a one acre parcel sold for Sh6.9 million in 2012.
After the loan deal, the NBK retained the mother title as security awaiting completion of loan repayments but the deal fell through, which saw the NBK move to court seeking to have the entire parcel sold off in May 2014 accusing the group of reneging on its repayment pledge.
The group and 153 buyers protested the impending sale and obtained an injunction that was subsequently followed by consultations leading to the consent.
“While the sellers prefer sale of the entire parcel (70 acres) at once, interested bidders or group of bidders constituting more than an individual targeting four plots or above can apply subject to a reserve price of Sh3.2 million,” said Mr Musau.