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National Oil Stares At A Ksh1.4 Billion Loss As Financial Woes Deepen

Nock
[PHOTO/ COURTESY]

Troubled National Oil Corporation of Kenya (Nock) has projected a Ksh1.4 billion loss for the year ended June 2020, even as it sinks deeper into financial woes.

The firm which owes creditors at least Ksh5.3 billion recorded a Ksh300 million last year.

According to documents submitted in Parliament, Nock recorded a 61.3 percent decline in fuel sales from 322.8 million litres a year earlier to 124.8 million litres in the period under review.

Hopes of the fuel retailer now lies in the government, as it hopes to get a capital injection that will help it pay banks and suppliers.

If the Corporation fails to get a rescue from the government, its assets could be seized and liquidated by lenders to recover the money.

In April 2020, the Kenya Commercial Bank (KCB) commissioned a liquidity and independent business review (IBR) with the aim of auctioning the fuel marketer.

Read: How Great White Investments Engineered Disappearance Of Fuel Worth Ksh300 Million At National Oil

In August, the bank also gave a 30-day warning to Nock demanding to be paid in full all the debt, or institute recovery measures which would include auctioning. The warning expired on September 12, 2020.

KCB is seeking to recover a debt of Ksh3.67 billion which has accumulated an interest of Ksh147.94 million as of August 31.

“In a letter dated August 13, 2020, a week before receiving the final draft IBR (Independent Business Review) report, the Bank issued a demand for full settlement of the loans in 30 days. This is a real threat and should nothing be done by the shareholder, then Nock may be wound up,” said Nock managing director Leparan Gideon Morintat.

The management wants a capital injection of Ksh3 billion from the shareholders in a bid to save it from liquidation.

According to Morintat, Nock has not received its budgetary allocation and grants from the government for the first quarter of the current financial year, and also has not been able to access previous grants amounting to Ksh745 million held in a fixed deposit account at KCB.

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Written by Francis Muli

Senior reporter at Kahawa Tungu, Muli has a passion for human interest stories. Believes in unearthing societal rots that have been hidden from the public eye.
Follow me on Twitter @FmuliKE. Email francis@kahawatungu.com

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