East African Cables (EAC) has obtained a court injunction in a bid to bar Equity Bank from appointing an administrator to take over its operations over its non-performing loan.
The court injunction restrains Equity and its agents from performing any administrative actions of the company until the case filed by the embattled company is determined.
The move comes after Equity Bank on 16 June issued a notice placing EAC under receivership and appointing an administrator to run the business to recover its huge loan to.
East African Cables, which is majority owned by Transcentury Group, obtained order arguing that the bank appointed an administrator while the two parties were still engaged in talks.
EAC Chairperson Michael Waweru has lauded the decision by the court in Nairobi.
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“I am glad that the brief setback that this unfortunate action had brought to the business is behind us and we can now focus on what we do best, providing quality cables to our customers across the region,” said Waweru.
He added, “We have been on what we viewed as positive discussions with the bank up until a day before the appointment of the administrator, therefore the extreme and unfortunate action taken by the bank came to us as a surprise.”
Waweru added that the manufacturer of copper and aluminium conductors was committed to settling its huge debt, which together with Transcentury Group, adds up to Sh3.01 billion.
“EAC is a renowned and astute business and we’ve been committed to meeting our obligations and continue to do so despite the prevailing challenging macro environment,” he avered.
EAC is a leading manufacturer of electrical cables and conductors in East and Central Africa, with the largest electrical cable manufacturing plant in the region.
On their part, EAC CEO Paul Muigai and board expressed confidence in the business and it regaining its footing even as the company grapples with the huge loan advanced by Equity.
“We are delighted to resume serving our customers in every corner of our country,” Muigai said.
This comes a day after Transcentury also obtained a court injuntion to also ward off a takeover by Equity Bank over the multi-billion shilling debt.
Equity had appointed Muniu Thoithi and George Weru of PriceWaterHouseCoopers (PwC) as joint administrators of East African Cables and Transcentury Group effective June 16, 2023.
Transcentury’s loan had been non-performing for four years and Equity said it spent the last two years giving it a chance to float a Rights Issue to raise Sh5.6 billion to offset the loan.
