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News Junction > Blog > Business > Leasing firm Vaell put under administration after default
Leasing firm Vaell put under administration after default
Business

Leasing firm Vaell put under administration after default

Published February 3, 2024
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CompaniesLeasing firm Vaell put under administration after default
Companies

Leasing firm Vaell put under administration after default

Friday February 02 2024

Vehicle and Equipment Leasing Limited (Vaell) Group managing director Paul Njeru. FILE PHOTO | NMG

Vehicle and Equipment Leasing Limited (Vaell) has been placed under administration after defaulting on creditors to the tune of Sh1.1 billion.

The administrator will now try to revive the company—which leases motor vehicles and other equipment—first before considering liquidation as a final option to help creditors recover their funds.

The running of the firm has been taken over by the Official Receiver in Insolvency, a semi-autonomous agency under the Office of the Attorney General.

“Take notice that the Official Receiver was appointed as administrator of the property of Vehicle and Equipment Leasing Limited, via a notice of appointment by the directors of the company with effect from the 18th day of January 2024, pursuant to the provisions of the Insolvency Act,” said the Official Receiver in Insolvency in a notice dated January 23.

Vaell had used computers, furniture, motor vehicles, machinery and heavy earth equipment worth Sh408.3 million as collateral.

The preferential creditors, who will be given priority in the payouts from Vaell’s cash flows or asset sales, include the Kenya Revenue Authority which is owed Sh445 million, according to the company’s statement of affairs seen by this publication.

Others are OikoCredit (Sh227.8 million), ABC Bank (Sh102 million), Consolidated Bank of Kenya Sh52.5 million), SBM Bank (Sh50.5 million), Co-operative Bank of Kenya (Sh46.4 million), Kingdom Bank (Sh39.5 million) and Spire Bank (Sh18.9 million.

Spire Bank closed operations after Equity Bank Kenya Limited acquired some of its assets and liabilities.

Vaell owes secured creditors Sh994.1 million.

Read: VAELL offers farmers 50 trucks for logistics

The company owes unsecured creditors, who risk losing most of their claims, Sh146.2 million.

They include Tree Capital East Africa (Sh45.4 million), TCEA Holdings (Sh35.4 million) and Muge Law Advocates (Sh8.8 million).

The voluntary administration was requested by the directors of the firm—Paul Waruingi Njeru and Wang’ombe Gathondu.

Vaell is owned on a 50/50 basis by Quipbank Limited and Paul Waruingi’s Investment and Charitable Trust Fund, with the shareholders likely to be wiped out as creditors’ claims take precedence.

“By the said appointment, the company’s affairs are vested with the Official Receiver as the administrator. In accordance with section 560 of the Insolvency Act, no action can be taken against the company without the consent of the administrator or of the court,” said the Official Receiver.

Any party having a claim against the company should provide written proof of the amounts owed, according to the receiver.

Under the law, the administration is meant to maintain a company as a going concern besides ensuring better recovery for creditors as a whole than would likely be the case if the firm were liquidated without first going through administration.

The law empowers administrators to take measures to rescue a company, with liquidation being the last resort.

Read: Judge dismisses leasing firm claim of Sh619m from NCBA

If a distressed company is sold or part of its assets liquidated, administrators will first distribute the proceeds to secured or preferential creditors.

Vaell is among the companies to be put under administration recently, indicating the impact of economic turbulence due to high interest rates, increased taxes and high operating costs.

The other firms that have been placed into administration include Mastermind Tobacco (K) Limited and logistics firm Sendy.

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#Leasing #firm #Vaell #put #administration #default

TAGGED:AdministrationBonface OtienodefaultfirmleasingOffice of the attorney generalOfficial receiverOfficial receiver in insolvencyputVaellVehicle and equipment leasing limited
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