Logistics company Multiple Hauliers is facing collapse following a Ksh14 billion debt owed to several creditors, who are now seeking a court nod to auction the company.
Among the creditors leading the pack in a court case is Prime Bank, which was owed Ksh807 million as of 2017. Prime Bank had issued Multiple Hauliers with a Ksh300.9 million overdraft and separate loans of Ksh178 million, Ksh269 million and Ksh60 million.
The loans from Prime Bank were tied to two parcels of land in Mombasa and Nairobi owned by the company.
In a bid to settle its bulging debt, Multiple Hauliers decided to borrow at least Ksh14.8 billion from several lenders, including banks, companies and individuals.
Read: Multiple Hauliers Loses Porsche Dealership In Kenya
Ksh10 billion was to come from a consortium entailing Stanbic Bank and NIC Bank (now merged with CBA to form NCBA Bank), while Ksh4.8 billion was to come from Mauritius-registered equity firm Barak Fund.
The loan facility from Stanbic and NIC did not materialise, leaving the company to depend on Ksh4.8 billion from Barak Fund. The company (Multiple Hauliers) used Ksh447 million to pay Prime Bank loan, leaving a balance of Ksh360 million).
Despite the payment, Prime Bank did not release title deeds for the Mombasa land that was used as security. In court papers, Multiple Hauliers argues that the bank should have released the title deed, arguing that only the Ksh447 million paid was secured against the Mombasa land.
At that time, Multiple Hauliers had around 1,500 trucks transporting goods across East Africa, an asset base that gave lenders an assurance of their funding. The company also had a dealership agreement with Porsche, which was terminated in January 2021.
Multiple Hauliers now wants the court to stop Prime Bank from auctioning the Mombasa land, a prayer that has been granted by Justice Alfred Mabeya until the case is heard and determined.
Read: How Indian Investors Pushed Kenyan Investor, Kariuki Mungai, Out Of Multiple Hauliers
A part from the Prime Bank case, Multiple Hauliers is also facing a Ksh532 million suit by Synergy Industrial Credit, which filed an insolvency suit on March 3, 2020.
Other creditors later joined the insolvency case include Mumbua Mutuku, Laura Jean Sylvester, Galana Oil Kenya, Barbara Jane Belcher, Dry Associates, Andrew Ian Moore Gordon, Victoria Wambui Kagunya, Robert James Scott Gordon and Margarethe Gordon.
The National Social Security Fund (NSSF), Weldcut Africa Ltd, Hardev Kaur Dhanoa and I&M Bank have also joined the case.
On its part, Multiple Hauliers, argues that the Ksh14 billion liabilities are outweighed by its Ksh19 billion asset base, hence liquidation is not necessary.
The company is expected to submit a detailed financial report to Justice David Majanja in September 2021, that will determine whether the insolvency case will go on.
In February 2020, Multiple Hauliers was dealt a blow after the court allowed HFC to auction 30 heavy duty vehicles belonging to Multiple Hauliers over Ksh2.1 billion loan facility.
Multiple Hauliers is owned by three Indians, Rajinder Singh Baryan (current Multiple Hauliers MD), Amrik Singh Heer and Tarlochan Singh Heer.
Two years ago, businessman Mungai Kariuki claimed that he was a part owner of Multiple Hauliers, but he was forced to leave in 1982 by Moi-era police boss Noah Arap Too.
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