Embattled TransCentury has obtained a court injunction temporarily barring Equity Bank from appointing a receiver manager to take over the business for failing to repay a loan.

The order by Justice Alfred Mabeya on Monday comes three days after Equity placed Transcentury and East African Cables under receivership for defaulting on a Sh3.01 loan.

According to the notice, East African Cables and Transcentury Group failed to repay the facility advanced by Equity Bank Kenya Limited four years ago after a failed rights issue.

The court deemed the application by Transcentury urgent and ordered that it be served to Equity promptly to respond within 14 days ahead of a hearing scheduled for July 3, 2023.

“This matter coming up on 19/6/2023 on the Notice of Motion dated 18/6/2023 before Honourable Justice A, Mabeya. And upon reading the supporting affidavit thereto, It is hereby ordered,” the court order reads.

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“For avoidance of doubt, the receivership is temporarily suspended pending inter partes hearing of the application,” added the directive from Justice Mabeya.

In seeking the orders, Transcentury claims Equity Bank unlawfully appointed a receiver while there were negotiations going on, terming this a “flagrant breach of legal procedures.”

“We considered the bank as a partner and were engaged in what we believed to be positive discussions to reach an amicable agreement, just one day before the receiver was appointed by the bank,” said Transcentury Group Chairman Shaka Kariuki.

The court order effectively bars the appointment of the receivers by Equity and restricts them or their agents from taking any actions in their capacity as receivers of the company.

TransCentury Group CEO Nganga Njiinu expressed confidence the troubled company would recover the lost time even as it fights to dig itself out of the financial hole due to the loan.

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.