Kenya: Kenya Planters’ Co-operative Union’s (KPCU) receivership has been lifted by the Kenya Commercial Bank. The development comes after the farmers’ union agreed to the new conditions set by the bank before it could waive the bankruptcy notice.
KPCU chairman David Gatei confirmed Monday that the matter has been agreed upon between the two organisations and a formal announcement will be made soon.
“The board has worked tirelessly and we have received a lot of support from President Uhuru Kenyatta. He is the one who will announce the new development at a time of his own,” said Gatei on phone.
The board last week paid Sh100 million as part of the Sh680 million debt it owes the bank. The rest of the money will be paid as per the arrangement they have agreed on.
He declined to explain how much money KPCU will pay the bank. However, another director who wished not to be named disclosed that the farmers’ organisation agreed to settle Sh400 million with the bank. This, he said, was agreed upon after they disputed the Sh680 million the bank was demanding.
The coffee miller had petitioned the bank to lift the receivership and allow farmers to pay the accumulated debt as per the period they will agree on.
A senior official with the bank who did not want to be quoted also confirmed to us that the deal has been agreed upon and the date is yet to be set when the formal announcement of the lifting of the receivership will be made.
KPCU was placed under receivership by KCB in October 2009, and Deloitte Consulting Ltd was appointed receiver managers over KPCU’s failure to repay a Sh644 million debt. Its assets were almost auctioned a year later, but the government intervened.
Late last year, KPCU directors had agreed with the bank to lift the receivership and be allowed to pay the debt as per an agreement they were to craft.
KPCU had agreed to pay Sh680 million to the bank after the waiver of interest accrued from a debt of Sh644 million that led the bank to place it under receivership. However, the deal flopped after the giant miller failed to obtain title deeds to the properties against which the debt was charged.
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