Kenyan billionaire and founder of Equity Group, Peter Munga, is in a dire situation as creditors move to auction his properties to recoup outstanding debts.
According to reports from Business Daily Africa, three properties belonging to the businessman are set to be on sale on the scheduled auction date.
Munga, along with his business associate James Karanja, had secured credit facilities of unspecified amounts, relying on guarantees provided by their firms, Equatorial Nut Processors and Meru Ginnery, both of which own the assets now up for sale.
A notice issued by Legacy Auctioneering Services revealed two vacant commercial properties, totaling 0.36 acres in Murang’a County, will carry the “on-sale” tag by October 13, 2023. These land parcels are held under leasehold agreements.
Furthermore, the auctioneer has been tasked with selling an industrial-cum-residential property in Meru County, spanning 15.6 acres, on October 17, 2023.
While the exact debt amount remains undisclosed, an inside source at Legacy Auctioneering Services hinted that it amounts to millions of shillings. However, they refrained from revealing the identities of the creditors.
Backstory
This is not the first time the businessman, who founded Equity Bank and has investments in various sectors has faced a debt crisis. In October 2017, Munga narrowly escaped the auction of his five houses in Nairobi’s Kasarani area, worth $2.7 million (Sh400 million) at the time, by making a last-minute payment to Jamii Bora Bank.
The exact loan amount owed to the bank, now operating as Kingdom Bank, was never disclosed.
Equatorial Nuts Processors, which provided guarantees for a portion of Munga’s loans in the current auction, is located near Maragua town and was established in 1994 for processing macadamia nuts, peanuts, and cashew nuts.
With an annual turnover exceeding $6.8 million (Sh1 billion), the company employs over 1,000 individuals and exports nuts to the US, Central Europe, and the Far East, as mentioned by Mr. Munga in a 2015 interview.
Munga also shared his ambition to develop Meru Ginnery in 2013, with plans to cultivate cotton for manufacturing towels and diapers. He believed this venture had substantial return potential.
Peter Munga is among several high-profile entrepreneurs who have faced auctions in recent years due to unpaid bank loans, some of which run into hundreds of millions of shillings.
Key Facts About Kenyan Billionaire Peter Munga
Peter Munga is the former chairman of Equity Bank, Kenya’s second-largest bank by market capitalization.
He is widely regarded as one of Kenya’s most esteemed businessmen and is the founder of Equity Building Society, which later evolved into Equity Bank, one of East Africa’s largest financial institutions.
Though he once held as much as 3.2% of the publicly traded company, he has since divested most of his shares and now owns approximately 0.4% of the bank. Additionally, he is a significant shareholder in East African insurer Britam Holdings and Equatorial Nut Processors.
Eqiuty should stand with this hero