East African Cables will delay in the publishing of its audited financial results for the year ended December 31, 2019, it has said.
“The delay has been occasioned by on-going discussions with the company lenders to complete the remaining portion of the debt restructure transaction,” company secretary Virginia Ndunge said in a notice.
In addition, the social distancing measures and restricted working hours enforced by the government due to Covid-19 Pandemic, have significantly affected the audit timelines, the firm says.
“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.
Accordingly, the directors of the company have applied for, and obtained an approval from the Capital Markets Authority (CMA), granting the company the extension.
This week, the cable maker got a major reprieve after SBM Bank (Kenya) rescinded its liquidation plans and instead crafted a debt settlement and restructuring agreement.
The lender had early this year filed a petition to liquidate the loss-making cable manufacturer after it defaulted on a Sh285 million loan.
“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 withdrawal of the petition is a significant step towards the company’s turnaround plan, management now says, that includes strengthening of the balance sheet, operational improvement and having the right funding structure for growth and profitability.
Other lenders seeking their monies include Ecobank which recently sought to recover Sh190 million, part of a Sh350 million credit facility extended to the company between 2011 and 2013.
The Nairobi Securities Exchange-listed firm jumped back to profitability last year despite a decline in turnover, posting net earnings of Sh634 million for the six months ended June 30, 2019.
This was a significant shift from losses of Sh303 million recorded over the same period the previous year, as the company which has facilities in Kenya, Tanzania and Eastern DRC faced a tough business environment in the wake of cheap imports mainly from China.
The firm also has presence in Uganda, Rwanda, Burundi, Southern Sudan and Ethiopia, through a distribution network.
It specializes in manufacturing an extensive range of cables for applications in domestic and Industrial lighting, as well as transmission and distribution of electricity.