Home » Rao speaks out on a Kshs 6 billion debt owned to the Kenyattas 

Rao speaks out on a Kshs 6 billion debt owned to the Kenyattas 

by Joshua Wanga
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With the Kenyatta family expected to release their apparent stranglehold on Kenyan politics next week, more and more details are surfacing about their business empire, financial dealings and business associates who owe them money.

The story stretches decades back.

Manu Chandaria’s father, an Indian immigrant, laid the earliest foundation of the Comcraft Group in 1915 when he relocated to Nairobi to start a provisions shop in Nairobi’s Biashara street.

As the business grew, his father and extended family members subsequently acquired Kaluworks.
When Mr Chandaria returned to Kenya after studying in the United States, he joined the company, expanded the group’s product offering and steered it to its remarkable growth.
Comcraft is now spread in more than 40 countries and US business magazine Forbes in 2011 estimated Comcraft to be worth $2.5 billion (Sh215.6 billion), the last time it valued the business.

In 2011, Mr Chandaria made it to the Forbes 40 Richest Africans list, and he is one of Kenya’s wealthiest businessmen.

In 2012, Kaluworks raised $14 million (Sh1.5 billion) in a corporate bond sale.
Kaluworks has been struggling financially over the last few years on the back of weak sales and increased competition from other cookware manufacturers.

Court papers show the company was knee-deep in Sh12.6 billion debts, including bank loans, unsecured commercial paper holders and shareholder advances, against assets of Sh1.3 billion when placed under receivership in May 2021.

NCBA which is owned by the Kenyatta family, put the company under receivership over non-payment of a Sh4.3 billion debt, placing the Cooperative Bank loan at Sh4.8 billion.

Under the settlement, Comcraft Group will inject Sh150 million to revive the business, offer NCBA Sh580 million and Sh628.4 million to Co-op bank.

The placement of Kaluworks under receiver manager Rao, Pongangipalli Rao, marked a rare blot in the career of industrial magnate Mr Chandaria, the chairman of Comcraft

Mr Rao gave the creditors options, including injecting the Sh750 million to revive the business, lease the company or sell the assets.
“In the view of lenders’ indisposition to provide further funding the administrator was unable to run operations of the company,” Mr Rao said.

But the lenders opted to return the firm to Chandaria’s Comcraft Group after balking at having to inject Sh750 million to revive the company amid hurdles in getting a buyer for the firm.

Kaluworks’ shareholders have agreed to pay the bankers Sh1.2 billion to lift the receivership, with NCBA and Co-op Bank opting to cut their losses.
A consent filed in court shows NCBA has agreed to an 88 percent write-off of its loan while Co-op Bank accepted to lose 55 percent of the Sh9.1 billion loans.
“The settlement entails write-off of 55 percent by Co-op and 88 percent by NCBA, which both banks have approved.”
“It was agreed that out of the capital injection of Sh1.2 billion an amount of Sh580 million will be paid to NCBA in full payment of NCBA debts whereas a balance of Sh680.4 million will be paid to Co-op bank,” PVR Rao said in the consent
NCBA Group and Co-operative Bank have surrendered a firm they seized from billionaire Manu Chandaria’s Comcraft Group after they gave up pursuit of a Sh6.6 billion debt.

The banks last year appointed a receiver manager to turn around Kaluworks, one of Kenya’s largest manufacturers of aluminium utensils and roofing sheets, or protect its assets in the race to recover the multi-billion shilling debt.

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