Bank debt sees mill put under receivership
By Jackson Okoth | May 14th 2014
By Jackson Okoth
Rupa Cotton Mills (EPZ) Ltd has been placed under receivership after it failed to clear a debt owed to Development Bank of Kenya Limited.
The company has been under strain following the entry of cheaper clothing from East Asia, making it difficult for it to settle with creditors.
“I am not able to discuss the financial status of Rupa Cotton Mills, including how much they owe the bank due to a confidentiality clause,” said Cyrille Nabutola, the Export Processing Zone chief executive.
Development Bank of Kenya has placed the financially troubled Rupa under receivership. Engineer Martin Odero and Kipngetich Arap Korir Bett have subsequently been appointed joint receivers and managers.
This is according to a notice dated April 30, 2014. The debt has been outstanding since August 27, 2008.
Efforts to obtain details from the bank on how much it is owed by Rupa were fruitless as our calls were transferred from one office to the other. A promise by the bank’s company secretary to call us back was unfulfilled by the time of going to press.
Rupa joins a long list of textile firms that have shut down or are struggling to survive stiff competition from cheaper apparel and textile from China and South East Asia.
“Trouble for the local textile industry can be traced back to liberalisation, which occurred across all world markets, removing the quota system and allowing more competitive countries like China to flood markets,” said Nabutola.
Other firms that have been shut down include Rivatex, Kicomi, Raymond Woollen Mills and Mountex.
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