KCB Group and Absa Bank have been given a go-ahead to seize assets of cement manufacturer, Savannah Cement Ltd.
The two lenders headed to the High Court seeking permission to seize assets of the company over a debt amounting to millions of shillings.
The cement manufacturer also went to court seeking to block KCB and Absa from from appointing an administrator or liquidating its assets.
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However, Justice Wilfrida Okwany declined the application by Savannah Cement noting that the company has admitted the debt.
She also noted that in this case, the lenders are on the receiving end and they are most likely to suffer losses.
“It is trite that parties to a contract are bound by the terms of their agreement and the court cannot rewrite the terms of the contract,” Business Daily quoted Justice Okwany.
As earlier reported on WoK, Barak Asset Recovery Limited is in the process of acquiring a controlling stake in Savannah Cement.
The Mauritian firm which also operates in Seychelles is seeking to acquire 60 per cent stake in the cement producer owned by Seruji Limited.
Barak described investment holding as it’s principal business in fillings made at the Comesa Competition Commission (CCC) while seeking approvals for the deal.
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The firm said that it is looking at restructuring Savannah to give it a new breath of life amid the poor financial situation.
“The proposed transaction entails the acquisition of 100 per cent of the shares in Seruji by Barak Asset
“The parties have submitted that Barak Assets hopes to restructure and grow the business of Savannah Cement which has experienced poor financial performance in the recent past,” said the CCC in a public notice.
The competition authority will consider the application.