Market News

Isinya steel mill goes under the hammer

loan

The steel-maker has two separate loans of Sh364 million and Sh31 million owed to an unnamed commercial lender. FILE PHOTO | NMG

Auctioneers have put on sale a Kajiado-based steel maker, citing failure to settle a bank loan.

A notice, published by Integra Auctioneering, invites potential buyers of Imara Steel Mill’s factory in Isinya and 7.3-acre land to attend the auction on October 31.

The factory sits on 3.3 acres on Namanga Road. The steel maker also owns undeveloped prime land in Kajiado and Narok counties.

“Developed on the property is a factory and its auxiliaries. On it is a three-storey administration block, residential bungalow and factory workstations,” says the notice.

The steel-maker has two separate loans of Sh364 million and Sh31 million owed to an unnamed commercial lender.

Construction underwent a rough patch from late last year to early this year after prolonged electioneering.

The steel industry is also experiencing a tough competition and effects of poor business environment from late 2017.

The number of properties going under the hammer or businesses crippled by mounting debt has risen sharply in recent months.

Borrowers of personal loans and small businesses contributed nearly half of the Sh264.6 billion stock of total bad debt held by banks last year, revealing tough times for borrowers hit by economic slowdown.

An annual sector report released by the Central Bank of Kenya (CBK) in August this year showed personal loan borrowers and traders defaulted on Sh121.4 billion debt in the year, accounting for 45.89 per cent of the industry total.

The CBK data painted a picture of households and small traders taking loans that they were unable to service.

The report was also a reflection of businesses that are struggling to stay afloat and others whose operations have ground to a halt following failure by the national and county governments as well as the private sector customers to settle their dues.

Kenya’s economy has grown at an average of five per cent per annum in the past four years but the growth has been overshadowed by a steady fall in corporate profits, a stagnation in workers’ incomes and retrenchment that have slowed down small businesses.