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Deacons trading suspension now extended to November

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The share was first suspended from the Nairobi bourse for 40 days on November 19 after it went into administration. FILE PHOTO | NMG

Shareholders of the troubled Deacons East Africa #ticker:DCON will have to wait until end of November to unlock the value of their investment.

Regulator Capital Markets Authority (CMA) Thursday extended the freeze on trade in the fashion retailer’s shares for a further 10 months from today (February 1).

“Notice is hereby given on the extension of suspension from trading of Deacons EA Plc shares following a proposal from the Joint Administrators to appoint an Independent Transaction Adviser, subject to the company trading at a profit by September 30, 2019 and thereafter agreeing on an actionable timetable in the turnaround process,” the Nairobi Securities Exchange said in a statement.

The share was first suspended from the Nairobi bourse for 40 days on November 19 after it went into administration, which was further extended for 10 days which lapsed Thursday.

The firm’s joint administrators Peter Kahi and Atul Shah of PKF Consulting on January 22 reached a deal with shareholders and creditors to allow them more time to identify a strategic or a financial investor to recapitalise the heavily indebted clothes vendor.

Shareholders and creditors could have salvaged only about Sh63 million had the firm been liquated last November, the administrators said, largely reflecting impact of sustained losses.

The firm struggled to recover following loss of key franchises like Woolworths and Mr Price amid piling debts.

The Insolvency Act of 2015 gives companies going through financial turmoil an opportunity to put their act together, including settlement of debts.

The fashion retailer had loans of Sh351.6 million maturing last year when it continued to register lower sales and larger losses attributable to various factors including loss of franchises.

The firm’s creditors include NIC Bank, which was owed Sh524.8 million as of December 2017 while loans from UBA Kenya Bank stood at Sh98.3 million.