Crown Paints, East African Cables to Delay FY2019 Results

Crown Paints, East African Cables to Delay FY2019 Results

Crown Paints PLC and East African Cables have said they will publish their audited financial results for the year ended December 31, 2019.

In separate public notices, first, the listed paint maker attributed the delay to incomplete financial statements.

“The delay in the finalisation of the audited financial statements has been occasioned by the difficult circumstance brought about by the COVID-19 pandemic and especially by the various measures restricting movement put in place by the Kenyan Government and total lockdown (now relaxed) by Uganda and Rwanda Governments.”

On the other hand, East African Cables’ company secretary Virginia Ndunge in a notice. says the delay has been occasioned by ongoing discussions with the company lenders to complete the remaining portion of the debt restructuring transactions. 

“The audit of the financial statements for the year ended December 31, 2019 is in progress and the board and management wish to assure the public that the audited financial statements shall be published no later than July 31, 2020,” the statement reads in part.

Both firms have applied for, and obtained approval from the Capital Markets Authority (CMA), granting the company the extension.

Crown Paints it expects to publish the results on or before 30th June 2020 and East African Cables no later than 31st July 2020.

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During the week, SBM Bank (Kenya) Limited withdrew its petition to liquidate East African Cables after the two reached a debt settlement and restructuring agreement.

“The agreement involves a restructure of the outstanding facilities by the bank under a new long-term facility and security arrangement,” Ndunge said in a public notice.

“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, recognizes and values this partnership,” she added.

The petition had been filed in January 2020 seeking to liquidate some assets of EA Cables after the company defaulted on a KSh 285 Million loan.

East African Cables is a premier cable manufacturer, with a footprint that spreads across East and Central Africa. The company has four manufacturing facilities; two in Nairobi, Kenya, one in Dar es Salaam Tanzania and one in Eastern DRC. In addition, EAC is present in Uganda, Rwanda, Burundi, Southern Sudan and Ethiopia, through a distribution network.

In 2018, the Group and Company recorded a loss of KShs 568.38 million and KShs 399.70 million respectively compared to a loss of KShs 663 million and KShs 454 million recorded in 2017.

According to the 2018 full-year report, the debt restructure exercise commenced end of 2017 came to conclusion in H1 of 2019. 

“This restructure was aimed at refinancing the existing debt over a longer tenor to allow plough-back of cashflows into the business and reduce monthly principal loan repayments. The benefits of the restructure will accrue to the business in 2019 going forward. Subsequent to year-end, the Group and Company refinanced its outstanding debt for a discounted full and final settlement of credit facilities outstanding to the bank. This resulted in a significant reduction of bank loans and borrowings. The saving from the debt restructure transaction will be booked in the 2019 year of income,” said the company.

According to the Business Daily, Standard Bank Plc, in 2019 agreed to take part of KSh1.56 billion and were paid KSh1.6 billion as final settlement. 

EA Cables a new loan from Equity Bank and used the amounts to pay off StanChart .

In March this year, Ecobank Kenya Limited appointed a receiver-manager to take over certain assets of the cable manufacturer over a KSh161 million loan.