Energy and infrastructure projects have for the longest time attracted the attention of ESG (environmental, social and governance) regulators and watchdogs. More recently however, ESG concepts have gained prominence in almost all other sectors of the global economy as boardrooms all over the world move to integrate ESG principles and metrics in their decision making.
When insolvency is inevitable, it is important for there to be a solution that minimizes losses, protects creditors and develops a rescue strategy where the business is viable. The newly-enacted Insolvency Act 2015 provides an alternative to liquidation procedures that enables the affairs of the insolvent company to be administered for its benefit as well as the benefit of its creditor.
Corporate restructuring features strongly in today’s corporate environment. Businesses are looking for original solutions that will help them to achieve their commercial objectives while mitigating risk exposure.
IKM has a formidable reputation for cutting-edge advice, which has seen the firm involved in many novel and complex transactions.
Our corporate team in Kenya works seamlessly with experienced colleagues from other practice areas in the firm to coordinate multifaceted transactions, deal with regulatory requirements, advise on tax matters, manage due diligence investigations and prepare all the required documentation.
Experience has included advising:
- A leading bank listed on the Nairobi Securities Exchange on the reorganization of its corporate structure with a view to making it more efficient through the introduction of a non-operating holding company.
- A leading bank in Kenya in the negotiations and amicable settlement of a matter in which the bank was seeking to recover USD100 million from a group of schools and chain of hotels in Kenya that were under receivership.
- A large horticulture company on a receivership, the process of debt restructuring and preparing a deed of settlement.
- A leading Kenyan bank in a dispute resolution matter where a company had challenged the bank’s right to appoint receivers over the company as well as the bank’s rights to exercise its statutory power of sale in a bid to recover a debt in excess of KES643 million (USD7 million).
- Minority shareholders in arbitration proceedings against a company for the fair valuation of their shares following oppressive conduct on the part of the company.
- The shareholders / directors of a company in winding-up a case as a result of impropriety on the part of some of the directors who were holding office contrary to the memorandum and articles of association.
- A group of eight companies in various sectors, including agriculture, insurance, real estate and motor vehicle franchising, in a due diligence and restructuring exercise.
- A leading group of companies with interests in farming, real estate and hotels in a reorganization.
In recent years, the media has been smattered with reports of companies in deep financial distress. Prominent among them are major leaguers such as Nakumatt Holdings, ARM Cement and more recently, Mumias Sugar Company. As observers collectively ponder what went wrong with these companies, market players are keenly watching to see if the provisions of the Insolvency Act, 2015 can help to put the situation right, keeping in mind that there may be many more casualties in the pipeline as a result of the COVID-19 pandemic.
As the global pandemic continues to wreak havoc on economies and businesses, an inevitable succession of profit warnings and bankruptcy notices have peppered the news reports. In the US, we have seen household names such as JCPenney and Hertz filing for bankruptcy under the infamous Chapter 11 provisions. And in the UK, behemoth retailer brands such as Debenhams and the Arcadia group have been severely hit and are undergoing surgical procedures, including deep headcount cuts.
The outbreak of COVID-19 has undeniably affected both borrowers and lenders negatively, with the exception of a few players such as those in medical supplies, basic food stuffs and certain technology, e-commerce and entertainment providers.