Proctor & Allan, a prominent Kenyan agro-processing company, has been placed under receivership due to an unpaid debt of Sh3.7 billion owed to KCB Bank Kenya Limited, marking a significant blow to one of the country’s oldest food manufacturers.
The decision, effective as of today, follows months of financial strain and unsuccessful attempts to restructure the company’s mounting obligations.
KCB Bank, one of Kenya’s largest financial institutions, appointed a receiver to oversee Proctor & Allan’s operations and assets, aiming to recover the substantial loan that the company has defaulted on.
Sources close to the matter indicate that the debt, accrued over several years, stems from loans taken to support the company’s operations and expansion efforts in the competitive food processing sector.
Despite its long-standing reputation for producing household brands like breakfast cereals, spices, and snacks, Proctor & Allan has struggled to maintain profitability amid rising operational costs and market challenges.
“We have taken this step to safeguard our interests and ensure the best possible outcome for all stakeholders,” a KCB spokesperson said in a statement late Tuesday.
“The receivership process will focus on protecting the company’s assets while exploring options to address the outstanding debt.”
The bank declined to provide further details on the timeline or specific recovery plans, citing the sensitivity of the ongoing process.
Proctor & Allan, established in 1968, has been a staple in Kenyan households, known for its diverse product range and contributions to the agricultural value chain.
However, industry analysts point to a combination of factors—including increased competition from imports, fluctuating raw material prices, and a heavy debt burden—as key contributors to its financial woes.
The company’s workforce, estimated at several hundred employees, now faces uncertainty as the receivership unfolds.
The appointment of a receiver was confirmed in a notice published Tuesday evening, though the identity of the receiver has not been disclosed. Under Kenyan law, the receiver will assume control of Proctor & Allan’s operations, with the primary goal of stabilizing the business and facilitating debt repayment to KCB.
This could involve restructuring, asset sales, or, in a worst-case scenario, liquidation if recovery efforts fail.
This development adds Proctor & Allan to a growing list of Kenyan firms placed under receivership by KCB in recent years, as the bank intensifies efforts to manage its non-performing loans.
In 2023, KCB reported a significant uptick in bad debts, prompting aggressive recovery measures targeting struggling borrowers.
The bank’s actions reflect broader economic pressures in Kenya, where businesses are grappling with high interest rates, inflation, and a challenging post-pandemic recovery.
Employees and suppliers of Proctor & Allan expressed shock and concern over the news.
“This is a company that has been around for decades. It’s hard to believe it’s come to this,” said a Nairobi-based supplier who requested anonymity. “We’re waiting to see what happens next, but it’s not a good sign for anyone involved.”
As the receivership process begins, attention will turn to whether Proctor & Allan can navigate its financial crisis and emerge viable, or if it will join the ranks of legacy Kenyan firms unable to withstand modern economic pressures.
