KENYA – Bio-Corn Products limited, a subsidiary of Nairobi-based manufacturing firm ISONS Group, will lose its multimillion-shilling processing plant to auctioneers after it defaulted on a loan owed to a local lender.
In a notice, Dalali Auctioneers sought to sale the firm’s 15-acre property that is located within an export processing zone (EPZ) in Eldoret without disclosing the value of the loan.
“Under instruction received form the charges we shall sell by public auction the undermentioned property on Friday, November 22, 2019, at the office of Joyland Auctioneers,” read part of the notice.
The property hosts a double-storey office block, power stations, two blocks of godowns under construction, a waste treatment plant as well as radiation and storage rooms, reports Business Daily.
The chemical maker Bio-Corn Products Limited opened the plant in August 2017 after purchasing the Kenya Furfural Company plant from its receiver managers Ernst & Young.
It uses maize cobs to produce various chemicals for industrial use which was expected to be a major boost to local maize farmers who often throw away the cobs as waste.
The plant manufactures furfural, which is used as a solvent in the refining of lubrication oils, pharmaceuticals, cosmetics, resins and plastics.
Its estimated annual production is 5,000 tonnes of furfural in addition to 2,500 tonnes of acetic acid and 400 tonnes of formic acid.
Bio-Corn’s struggles to repay the loan come at a time when a tough economic environment has seen companies shut down, default on loans and lay off staff underlining their distress.
In September, cash strapped Mumias Sugar Limited company was placed under receivership by KCB Group over US$ 60m financial woes accrued over the past four decades.
KCB Group sorted for Tact Consultancy Services and appointed Mr PVR Rao as the sugar company’s receiver manager to take over the day to day running of the sugar company.
In mid-October, the Kenyan High Court extended orders stopping sale of the assets belonging to the troubled company indicating the status quo of the miller be maintained and no changes to be made in the company while it is under receivership.