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Kwale Cement’s land set for auction over debt




Bank of Africa branch at Reinsurance Plaza in Nairobi. FILE PHOTO | NMG 

Auctioneers have put land valued at hundreds of millions of shillings belonging to Kwale Cement on sale over the failure by the company to settle a bank loan.

The Business Daily learnt the debt is owed by the cement maker to Bank of Africa (BOA) and stands at more than Sh500 million.

The move is only the latest to hit the troubled Mombasa-based firm, which had earlier last year pushed back a similar auction by the lender over the debts.

It also successfully stopped another auction of its properties over debts owed to Chase Bank (now SBM Bank Kenya) by the Kenya Deposit Insurance Corporation, the former receiver manager of Chase Bank to recover a Sh1.12 billion loan.

In a notice published in the dailies yesterday, Watts Auctions, the auctioneer, invited potential buyers of the prime land to attend a sale event early next month.

“Under instructions received from our principals, the chargees in the exercise of their statutory power of sale shall sell the under mentioned property on February 8, 2019, at 11am near the general post office Mombasa by public auction,” they said. “All interested purchasers are requested to view the property and verify the details for themselves. A deposit of at least 25 per cent must be in cash or bankers cheque at the fall of the hammer.”

The total acreage of the four pieces of land under auction by Watts Auctions is 86.05 acres.

The prime agricultural land is divided into sizes of 12, 52, 10 and 9.9 acres respectively and is located in Shimoni area, Kwale County.

The auction is the latest to dog the troubled firm.

Kwale Cement and a sister company, Rising Star Commodities stopped the Bank of Africa from auctioning four of its properties last September to recover the debt.

Justice P.J.O. Otieno saved the pair from the gavel after ruling that a notice under Section 96(2) of the Land Act, a mandatory requirement, was never served upon them.

And in June last year, Kwale Cement and Rising Star Commodities were engaged in a court battle with Chase Bank over five pieces of land the lender wanted to auction to recover a $11.2 million (Sh1.12 billion) loan.

High Court judge Anne Omollo, however, at the time stopped Chase Bank from auctioning the land, saying the lender had not proven it furnished the two firms with a 40-day notice before putting its assets up for sale.