The National Securities Exchange extends the suspension of Mumias Sugar Company and fashion retailer Deacons East Africa from trading. This not only halts any investor from trading in the mentioned companies but also locks in previously earned investor wealth.
Photo Credits: Nairobi Business Monthly
The two companies have been placed under receivership since September 20, 2019 and November 19, 2018 respectively due to total debts amounting to billions of shillings. They risk being delisted from trading on the NSE if they do not come up with remedial plans in the near future.
"The extension of suspension from trading of the company's shares will remain in force until further notice. All shareholders, investors and the public are advised to take note of the delisting," said NSE concerning both companies.
Mumias Sugar Company was placed under receivership by KCB Bank, i.e taken charge by KCB Bank, back in September 20, 2019 with an outstanding loan of 12.9 billion shillings. This lead to the appointment of a temporary consultancy management agency, PVR Rao, to handle its day to day businesses. In spite all the debt being incurred by the company, the government, through the Treasury, has a partial ownership of 20% of the company.
Recently, the national government - through the Treasury - has been approached by Kenya Airways (KQ) for help from its growing debt to offset its previous outstanding debt of 5 billion shilling. This might be another angel-investor move by the government that is similar to Mumias Sugar Company in 2017. Investors are keeping their hopes in the company's struggling moments following the governments directive to ban all international flights.
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