KENYA – Equity Bank, a Kenyan financial service provider, is taking over a total of US$20m (KSh2 billion) worth of loans that had been advanced to East African Cables by various lenders, including Standard Chartered Bank (Kenya) and Ecobank Kenya Limited.
According to Business Daily, the cables manufacturer has disclosed details of its debt restructuring in its latest annual report.
Equity Bank has been revealed as the lender that provided KSh1.6 billion (US$16m) that was used to settle StanChart claims. StanChart wrote off Sh1.5 billion (US$15m) and opted to walk away from the debt-ridden firm with the Sh1.6 billion (US$16m).
“Subsequent to year end, the group and company signed a facility agreement amounting to Sh1.6 billion (US$16m) with Equity Bank Kenya Limited to restructure the loans previously held by Standard Chartered Bank Kenya and Standard Chartered Bank Tanzania,” EA Cables says in the report.
Buyout of the Stanchart loans was completed in May. The cables manufacturer added that it has approached Equity to also take over a Sh161 million (US$1.6) loan owed to Ecobank Kenya and Sh285 million (US$2.8m) owed to SBM Bank Kenya.
“The new lender has offered the group a tenor of ten (10) years with a moratorium of two (2) years on principal repayments and a six (6) months moratorium on interest payments,” the cables manufacturer said of the negotiations with Equity.
In buying out StanChart, Equity changed the features of the loan to a term of 10 years with a grace period of six months and 24 months on interest and principal respectively.
Prior to taking over the loans from its rivals, Equity had already lent more than Sh2 billion to EA Cables.
Most of the cable manufacturer’s assets are pledged to Equity. EA Cables approached the bank to take over the loans which it is unable to repay on its own.
“The loans due to Ecobank Kenya and SBM Bank Kenya … are due and payable on demand and in the event that the lenders recall the loans due, the group and company do not have the ability to settle these loans in the normal course of business,” the company said.