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Troubled National Oil staring at Sh1.4 billion loss

The troubled  National Oil Corporation of Kenya (Nock) is projecting a Sh1.44 billion loss for the year ended June 2020 with they attribute to their deeper financial woes.

Documents tabled in Parliament show that it’s losses will more than triple from the Sh300 million recorded last year.

This is will worsen the situation for the state agency that is staring a possible seizure and auction of its assets to pay back the defaulted loans totalling to Sh5.3 billion.

Nock is attributing the loss to sharp decline in fuel demand and sales that shattered its revenues.

It’s sales declined to 124.8 million litres in the period under review, representing a 61.3% of the 322.8 million litres in 2019.

Nock managing director Leparan Gideon Morintat told Parliament that they are hoping for a capital injection from the Treasury to settle the loans and another Sh628 million to clear supplier pending bills.

In August, KCB demanded full settlement of its loan in 30 days with threats to institute recovery measures that may force Nock to wind up business.

“In a letter dated August 13, 2020, a week before receiving the final draft IBR (Independent Business Review) report, the bank issued a demand for full settlement of the loans in 30 days i.e. by September 12, 2020, failure to which they will institute recovery measures,” Morintat told the Senate Energy committee.

As at August 31, the agency owed KCB Sh3.67 billion in principal loan and an interest of Sh 147.94 million.

Nock also owes Stanbic Bank Sh1.29 billion in principal loan and an interest of Sh162.12 million.

The ailing agency is still expecting shareholders injectto Sh3 billion for its working capital in the current financial year which will end in June.

Mr Morintat added that National Oil had not accessed government grants of Sh745 million that is held in a fixed deposit account at KCB.

 


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