Prime Bank has appointed an administrator for Midland Hauliers Limited Company after the transporter defaulted on its loan whose size was not disclosed.
The decision, enabled by the Insolvency Act 2015, was announced through the latest issue of the Kenya Gazette.
Prime Bank named Ponangipali Venkata Raman Rao as Midland’s administrator effective April 24.
The bank holds a floating charge — a claim on all assets of the transport firm in the event of insolvency.
The administrator is expected to manage Midland and keep its creditors updated on the company’s health and viable options to be considered including selling some or all of its assets.
Midland was established in 2001 and has a fleet of over 130 trucks operating in Kenya, Uganda, Tanzania and Rwanda, according to information on its website.
The transport company joins a growing list of firms that have gone into administration after failing to pay their debts.
Others that have suffered a similar fate are supermarket chain Nakumatt Holdings, liquefied petroleum gas (LPG) dealer Midland Energy, ARM Cement #ticker:ARM and fashion retailer Deacons East Africa #ticker:DCON.
Also in this group is construction company Spencon Kenya Limited, which was placed under administration in 2017.
Administration is meant to maintain a company as a going concern besides ensuring better recovery for creditors as a whole than would likely be the case if the firm were liquidated without first going through administration.
However, signs of recovery for firms already under administration has not been forthcoming with ARM becoming the first one to be sold.
ARM’s administrators last week sealed a Sh5 billion deal with National Cement Company, a wholly-owned subsidiary of the Devki Group, which will acquire all the Kenyan cement and non-cement assets and businesses of the collapsed firm.