Nigerian Bank Moves to Take Over Supermarket Over N871.5bn Debt After Taking Over Stallion Group
United Bank for Africa in Kenya has procured permission to auction a supermarket’s land over N871 billion.
A high court permitted the bank after the inoperative company and its management failed to meet up with the payment of debt.
In Nigeria, the bank took over the assets of Stallion Group, a multinational company with headquarters in Dubai.
United Bank for Africa (UBA) in Kenya has been given permission to sell a piece of land belonging to Uchuni Supermarkets on Langata Road, Kenya, over N871. 5 billion (Ksh 162 million) debt.
A high court granted the bank permission to auction the land after it emerged that the inoperative supermarket and management had yet to pay the debt, three years after getting a deal on the Company Voluntary Agreement (CVA).
UBA Allowed the Auction of a Supermarket Land
In 2022, UBA Kenya revealed plans to sell the property after it appeared the government was moving to acquire the land compulsorily, stating that the bank should be paid first after the sale as it has the title to the property as a guarantee.
The Bank, however, extended plans to auction land and recover its money.
According to Justice Mabeya, three years into the CVA, the debtors have not made any payments, and there was nothing to reflect that non-core assets would be sold and the earnings taken towards paying creditors as agreed.
The judge said:
“Only beautiful promises that are made by the company (board). The company must be told that creditors do not live on empty, beautiful promises that are nothing but a bluff! Businesses and the economy are run on cogent and pragmatic proposals that are not only realizable but are practicable and real”.
The company was against the application, stating that the matter had been dealt with in an earlier decision and the application dismissed.
Lawrence Ngao said the CVA was still valor and partly amended after meetings with the creditors. He said UBA was taking 10% of the land, about N871 billion.
There were disagreements that the lender did not contain the consent of other lenders, like the government seeking about Sh1.2 billion and ICDC Limited (Sh116 million).
Ngao said that the entire body of creditors had approved the survival of CVA in August this year.
He informed the court that the property is an important income generator and the success of CVA depends on it, and the agreement proposes to pay back the bank’s loan in two years instead of recalling the amount immediately.
The report said UBA declined knowledge of the meeting as it was not invited to attend and did not recognize the corrected CVA.
Court demands documents showing the value of landed properties
Documents brought to court disclosed that the property’s open market value as of September 2018 was around Sh600 million and the forces sale value at Sh450 million.
In the CVA, which was introduced on July 1, 2020, the creditors agreed that secured creditors would get a portion of their old debts as an upfront payment pending the completion of the disposal of the noncore assets, with the balance being paid over six years and in other occasions over five years, it is also stated that all monetary decrees, debts recovery claims, outstanding loan facilities, and rent claims, including interest and penalties against the company as of March 2, 2020, would be paid together with the CVA.
Per Justice Mabeya, the company has defaulted in implementing the provisions of the CVA as no creditors have received any payment, and the management failed to call for periodic meetings.