NCBA Bank takes control of Multiple Hauliers in $55.7 million debt dispute

NCBA Bank Kenya has taken fresh control of logistics company Multiple Hauliers (EA), opening a new phase in the insolvency dispute over KSh7.2 billion ($55.7 million) owed to the lender.

NCBA said Muniu Thoithi and George Weru of PricewaterhouseCoopers Ltd. (PwC) have been appointed joint administrators of Multiple Hauliers. The bank’s claim is part of about KSh31 billion ($240 million) owed to various lenders and creditors by the transport company.

The appointments follow a Court of Appeal ruling that gave NCBA a reprieve in its dispute with the debt-laden transporter, staying the implementation of a High Court order that had placed the company’s restructuring under the control of the Official Receiver.

Court revives NCBA’s creditor challenge

A three-judge bench comprising Justices Gatembu Kairu, Fatuma Ochieng and Asike Muchelule ruled Friday that NCBA had raised arguable grounds in its appeal against Justice Alfred Mabeya’s Sept. 13, 2024, decision.

That ruling had protected Multiple Hauliers from creditors while allowing the official receiver to oversee the completion of a proposed deal with Amava Consortium. The transaction, which was expected to be completed by December 2024, had been presented as a possible solution for the struggling logistics company.

NCBA challenged the arrangement, saying its statutory right as a secured creditor to appoint administrators had been overlooked. The bank, which is owed more than KSh7.2 billion, argued that keeping the company’s directors in effective control exposed creditors to further losses as the value of its assets declined.

The lender also challenged Justice Mabeya’s decision to appoint the Official Receiver without a formal application. NCBA said its own administrators had previously resigned and that no steps had been taken to replace them.

NCBA pushes recovery amid debt crisis

According to the bank, the order left it “handicapped” in recovering its loan and removed rights available to it as a secured creditor. The Court of Appeal found that NCBA had raised a serious legal question over whether the High Court had jurisdiction to appoint the Official Receiver without an application.

The dispute has added to years of financial pressure at Multiple Hauliers, one of East Africa’s major transport companies. The company owes billions of shillings to several banks, including KCB, Coop Bank and I&M Bank, while efforts to bring in new investors have failed three times.

Amava Consortium was the latest investor to put forward a plan for the company. Multiple Hauliers’ directors said the proposed deal could provide fresh capital, help restore operations and protect creditors. The Court of Appeal’s decision has now cast uncertainty over the Amava transaction and the wider restructuring process as NCBA moves ahead with its administrators.