Manu Chandaria, a 93-year-old Kenyan businessman, has regained control of Kaluworks Limited, one of the firms operating under his billion-dollar enterprise Comcraft Group.
Chandaria regained control of the company from NCBA Group and Co-operative Bank Group after the Kenyan lenders dropped their pursuit of a Ksh6.6-billion ($55 million) debt.
Kaluworks is a manufacturing firm and a subsidiary of Chandaria’s main company Comcraft Group.
The firm employs more than 30,000 people in 45 countries and produces steel, polymers, and aluminum goods from its sites in 16 African countries.
It has been battling a debt crisis in its principal market, Kenya, for several years, with debt exceeding Ksh12.6 billion ($104.9 million) due to lackluster sales and growing competition from other aluminum cookware and roofing sheet makers.
According to a court consent obtained by BusinessDaily, NCBA agreed to write off 88 percent, or Ksh3.8 billion ($31.6 million), of its Ksh4.3-billion ($35.8 million) credit to Kaluworks, while Co-op Bank agreed to forfeit 55 percent of the Ksh9.1 billion ($975.7 million) in loans.
Comcraft Group has also promised to inject Ksh150 million ($1.25 million) into the business to revitalize its operations, while NCBA will receive Ksh580 million ($4.8 million) and Co-op Bank will receive Ksh628.4 million ($5.23 million).
The news, which comes more than a year after Chandaria lost control of Kaluworks to NCBA Group and Co-operative Bank Group after failing to repay its Ksh9.1-billion ($75.7 million) debt, marks a watershed moment in Comcraft Group’s relationship with Kenyan lenders.
In an effort to protect their assets in the struggle to recover the multimillion-dollar debt, the Kenyan banks hired Pongangipalli Venkata Ramana Rao as the receiver-manager in 2021 to turn around Kaluworks.
Its placement under receiver-manager Pongangipalli Rao is the first time an entity managed by Chandaria has been placed in such a situation. In accordance with their recent agreement, the lenders returned the firm to Chandaria’s Comcraft Group after it agreed to inject Ksh750 million ($6.24 million) to revive the company amid difficulties in finding a buyer.
