Three prime properties owned by businessman Peter Munga are set to be auctioned by creditors seeking to recover their unpaid dues, marking the latest debt tussle for the billionaire investor.
Mr Munga and his business associate James Karanja had taken credit facilities of unspecified amounts and had relied on guarantees by their firms Equatorial Nut Processors and Meru Ginnery, which own the assets targeted for sale.
A notice by Legacy Auctioneering Services shows that two vacant commercial properties measuring a total of 0.36 acres in Murang’a County will go under the hammer on October 13, 2023.
The land parcels are held on a leasehold basis.
The auctioneer has also been mandated to sell an industrial-cum-residential property in Meru County sitting on 15.6 acres on October 17, 2023.
“It … is developed with a ginnery factory consisting five permanent go-downs, storage room, office, two ablution blocks, weighbridge, two servants’ quarters,” reads the description of the property, which is also held on leasehold tenure.
An insider at Legacy Auctioneering Services told Business Daily that the debt runs into millions of shillings but declined to divulge details of creditors.
Mr Munga had not responded to our calls by the time of going to press.
This is the latest debt battle for the businessman who founded Equity Bank and has investments in multiple sectors including agriculture, education and insurance.
Mr Munga in October 2017 averted the auction of his five houses in Nairobi’s Kasarani worth Sh400 million at the time after making a last-minute payment to Jamii Bora Bank.
The value of the loan owed to the bank –which is now trading as Kingdom Bank— was not disclosed.
Equatorial Nuts Processors, which guaranteed part of the businessman loans in the new auction, is located a few kilometres from Maragua town and was established in 1994 to process macadamia nuts, peanuts and cashew nuts.
It employs over 1,000 employees and exports nuts to the US, Central Europe and the Far East with an annual turnover of over Sh1 billion, Mr Munga had said in an earlier interview in 2015.
Mr Munga had also said he bought Meru Ginnery in 2013 to grow cotton with the hope of manufacturing towels and diapers. He said the business had the potential to generate good returns.
“I would not venture into it if I did not expect to earn. The textile industry in Kenya has a lot of opportunities because currently, the country does not meet its quota in Africa Growth and Opportunity Act opportunities to access the market in America,” he said.
Mr Munga is among scores of high-profile entrepreneurs that have faced auctions in recent years over unpaid bank loans running into hundreds of millions of shillings in some cases.