In Summary
  • Creditors are seeking urgent measures because the firm has announced its exit from the Kenyan market.

  • The NSE listed company owes some of its employees salaries and pensions.

  • Atlas is also listed on the London Stock Exchange.

  • In an email interview with Smart Company, Atlas said that suppliers have until February 12 to prove their claims to “allow the liquidation process to move forward to the next stage”.

Suppliers of the loss making Atlas Development and Support Services Ltd want the government to appoint independent auditors to probe the company’s financial affairs.

It has emerged that the firm, which mainly focuses on providing logistical support to oil and gas exploration companies, owes more than Sh400 million to creditors. 

The appeal by creditors has assumed an urgent tone because the firm has announced its exit from the Kenyan market.

A list of creditors seen by Smart Company includes the Turkana County government and a community group from the area which are owed Sh1.5 million and Sh302,919 respectively.

The company, which is listed on the Nairobi Securities Exchange, is said to owe some of its employees salaries and pensions.

EXITING KENYAN MARKET

Also affected are firms involved in electrical, logistics and energy provision that were contracted by Atlas in different periods when it operated in Kenya.

It is alleged that most of the firm’s creditors were instructed to invoice Atlas’ subsidiaries — Ardan Logistics Kenya Ltd, Ardan (Medical services) Ltd and Ardan (Civil Engineering) Ltd — which have since December 1 been liquidated, raising questions whether it was a scheme by the UK company to defraud local firms.

Atlas is also listed on the London Stock Exchange.

Last month, it announced that it would close its Kenyan subsidiaries to allow it shift its administrative functions and activities to Ethiopia, marking its exit from the local market.

At the time, the company said delayed payments from its debtors due to a downturn in global oil prices led to budget cuts by many of its clients.

“We have taken steps to place our Kenyan subsidiaries into formal liquidation proceedings. Since the downturn in the oil and gas market, we have found that clients are no longer placing a premium on our high quality services and are demanding terms which are not economically viable,” said Atlas’ chief executive officer Carl Esprey in a statement issued last year.

PROMISED TO PAY

In a letter dated August 24, 2015 Atlas admitted that it was undergoing cash flow challenges and that it would settle outstanding debts to suppliers out of receipts from its debtors.

They did not, however, say when they would pay up. 

“We are conscious of our obligations towards our suppliers and creditors and are working to make provision so that our suppliers and creditors are not unnecessarily prejudiced by the current events. Our intention and proposal is to make gradual settlements of amounts due to our suppliers and creditors from monies collected from our debtors,” reads the letter co-signed by Atlas’ regional director Nick Arnold and chief finance officer Barry Lobel.

In an email interview with Smart Company, Atlas said that suppliers have until February 12 to prove their claims to “allow the liquidation process to move forward to the next stage”.

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