SBM Bank withdraws petition to wind up EA cables

SBM Bank (Kenya) Limited has withdrawn a petition to liquidate East African Cables #ticker:CABL after the two reached a debt settlement and restructure agreement.

SBM Bank in January this year filed a petition to liquidate the loss making company after it defaulted on a Sh285 million loan.

EA Cables company secretary Virginia Ndunge said in a statement Wednesday that the agreement with the lender involves a “restructure of the outstanding facilities by the Bank under a new long-term facility and security arrangement”.

“The Board and Management of the Company appreciate the great support they have received from all the lenders in the Company’s debt restructure plan, recognises and value this partnership,” Ms Ndunge said in the statement.

EA Cables is part of a group of companies owned by investment firm TransCentury #ticker:TCL and which have struggled to pay various creditors including bondholders and banks.

The cable manufacturer’s biggest lenders, the Kenyan and Tanzanian branches of Standard Bank Plc, last year agreed to take a haircut on Sh1.56 billion and were paid Sh1.6 billion as final settlement.

EA Cables took new loans from Equity Bank and used the amounts to pay off StanChart #ticker:SCBK.

In March this year, Ecobank Kenya Limited appointed a receiver manager to take over certain assets of the cable manufacturer over a Sh161 million loan.