In Summary
  • The cement manufacturer told Parliament last week that a huge chunk of the Sh10.8 billion it is yet to pay outsiders is owed to the lender and that it currently lacks the capacity to settle it.
  • Portland took an initial loan from the bank in 1978, which has subsequently been enhanced to the current level.
  • Managing director Simon Ole Nkeri said the biggest chunk of the loan was taken in 2014 to the tune of Sh3 billion.

Cash-strapped East African Portland Cement Company (EAPCC) risks losing four parcels of land to Kenya Commercial Bank (KCB) over a 40 year old loan that has accumulated to Sh4.5 billion.

The cement manufacturer told Parliament last week that a huge chunk of the Sh10.8 billion it is yet to pay outsiders is owed to the lender and that it currently lacks the capacity to settle it.

Portland took an initial loan from the bank in 1978, which has subsequently been enhanced to the current level. Managing director Simon Ole Nkeri said the biggest chunk of the loan was taken in 2014 to the tune of Sh3 billion.

“KCB has a legal lien against four parcels, but a debenture against all assets of the company as a result of the loan that is owed to them,” he told the National Assembly Trade, Industry and Cooperative Committee.

He said the cement manufacturer is experiencing difficulties servicing the loan and has on several occasions consulted with the KCB in order to restructure the repayment plan. “We have had several restructures to ensure we service the loan as and when we have capacity to,” Mr Nkeri said.

The company said it spent Sh151 million of the loan acquired from KCB in 2014 to purchase three dampers and excavators from India. The machines have since broken down, yet the ones bought much earlier are still working.

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