Heavy Equipment
Vaell Opts for Administration in Sh1bn Default Battle
An administrator has been appointed to run a restructuring attempt.
Vehicle and Equipment Leasing Limited (Vaell) has gone into voluntary administration in an attempt to stay afloat amidst a daunting challenge of a Sh1 billion loan default.
This follows a request by the directors of the firm—Paul Waruingi Njeru and Wang’ombe Gathondu – who are seeking the help of an administrator to save the company from potential collapse.
The Official Receiver in Insolvency, a semi-autonomous agency under the Office of the Attorney General, will be running the restructuring attempt.
“The Official Receiver was appointed as administrator of the property of Vaell, via a notice of appointment by the directors of the company with effect from the 18th day of January 2024,” the Official Receiver said in a January 23, 2024 notice.
Vaell—which leases vehicles and other equipment, is owned on a 50/50 basis by Quipbank Trust Limited and Waruingi’s Investment and Charitable Trust Fund.
Quipbank is an equipment bank that offers vehicles and equipment rental and sales options. The company partners with leasing companies across the region to dispose and rent surplus used heavy equipment.
The company had used its heavy construction machines, motor vehicles, furniture, and computers valued at Sh408 million as collateral.
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The administrator will first attempt to revive the company before considering liquidation as a final option to aid creditors in recovering their money.
If this fails, the Official Receiver will proceed to liquidate the company.
The preferential creditors, who will be prioritised in the payouts from cash flows or the sale of assets, include the Kenya Revenue Authority which is owed Sh445 million.
Others are OikoCredit (Sh227.8 million); ABC Bank (Sh102 million); Consolidated Bank (Sh52.5 million); SBM Bank (Sh50.5 million); Co-operative Bank (Sh46.4 million); Kingdom Bank (Sh39.5 million); and Spire Bank (Sh18.9 million).
The secured creditors are owed a combined Sh994.1 million.
Vaell owes unsecured creditors a total of Sh146.2 million.
These creditors include Tree Capital East Africa (Sh45.4 million), TCEA Holdings (Sh35.4 million), and Muge Law Advocates (Sh8.8 million).
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