Deep in debt Kenya Power is at mercy of Banks
SEE ALSO :Micro-lenders sink deeper into lossesKenya power owes banks Sh113 billion, which is in breach of ratios for commercial borrowing owed to banks, including Equity, First Rand, Standard Chartered and Stanbic. Of the extra debt that the company took, Sh9.9 billion has to be paid within the year while Sh49 billion is payable thereafter. The firm cannot meet its immediate obligations since short-term liabilities are twice as much as its short-term assets which puts it in trouble with its lenders. “CMA (Capital Markets Authority) regulations require that the issuer is not insolvent and should have adequate working capital,” said Ouko. He added that the company’s current assets of Sh54.6 billion were less than its liability of Sh106.2 billion, resulting in a negative working capital of Sh51.6 billion. Banks’ patience with insolvent firms has thinned lately, putting several of them, including Athi River Mining and Deacons in receivership.
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