Kenya Commercial Bank (KCB) Kenya has put on sale, a parcel of land that it took over from the East African Portland Cement Company (EAPCC) as part of a deal to settle a Sh6.8 billion debt. The parcel of land located in Mavoko, Machakos County measures more than 2,000 acres.
In a notice, the lender said it would sell the expansive block of land and regularise part of it currently occupied by squatters and other settlers, even as it targets to raise up to Sh5 billion from the sale.
“First and preferential priority shall be offered to parties in current physical occupation of identifiable portions of the referenced properties,” the bank stated in a notice.
Sale of the land is expected to help reduce the bank's stock of bad debt. The lender's non-performing loans had grown to Sh169.9 billion as of June. The sale will be done through land regularisation which refers to handing formal and permanent ownership to an occupier.
The bank said that the exercise shall be by way of sale and transfer to existing, willing, and capable occupants as well as other interested and willing buyers capable of acquiring any available portions of the properties.
“KCB Limited shall not accept any liability for any losses or damages arising from information by or dealings with third parties,” the lender said.
KCB and EAPCC entered into a settlement deed in 2019 that consolidated several loan facilities into one term loan.
The loss-making company’s shareholders later transferred about 2,000 acres to KCB to retire a Sh6.8 billion debt. By June 2021, EAPCC had transferred enough land to reduce the loan by Sh4.85 billion.
EAPCC in October 2022, said it had completed the settlement of the loan from KCB via land transfers to the lender, cutting its finance costs by Sh735 million in the year ended June 2022. The KCB debt was initially in the form of several facilities meant to cover working capital.
But after a breach of agreements, the lender recalled the debt and subsequently entered into a settlement deed with EAPCC in 2019 where the facilities were consolidated into one term loan. Plans to dispose of the land have been marred by court cases as squatters who invaded the land and settled on the parcel in 2010.
Three umbrella groups –Syokimau Mavoko Community Association, Ngwatanio ya Mkamba Self Help Group and Kathama Welfare Association— had been recognised by EAPCC.
Another set of squatters lost a bid to be declared the owners of the land after a judge in Machakos ruled that the land belonged to EAPCC.
The Environment and Land court dismissed the claim by individuals and officials of Aimi Ma Lukenya Society stating that the land belonged to the cement company.
The squatters first moved into the land soon after the company advertised its intention to sell it up after exhausting limestone deposits.
The notice added the process shall be undertaken by a team authorised by KCB to conduct the regularisation and sale.
“To give effect to this notice, the team authorized by KCB Bank Limited will immediately engage the occupants of the inhabited parcels at the site office located on the properties,” the notice added.
