Many experiences with distressed businesses in Kenya culminate in a lose-lose scenario in which both creditors and business owners register substantial losses. Despite the attempts by the Insolvency Act 2015 to cure such outcomes by introducing novel approaches such as administration and Company Voluntary Arrangements to rescue distressed companies, the intended effect has proved elusive.
The banking and financial service industries in Kenya are well developed and have enjoyed exponential growth alongside the country’s booming economy.
According to the World Bank, Kenya’s financial sector is the third largest in sub-Saharan Africa, making a significant contribution to economic growth and job creation. The government’s Vision 2030 identifies access to finance as critical to enhancing the prospects for growth, regional competitiveness and shared prosperity.
Our lawyers advise some of the largest financial services companies and institutions on both their day-to-day operations and wider strategic objectives. We help our clients contend with legal issues in banking, including restructurings and regulatory demands.
Our clients include: asset managers, capital markets and their participants, investment banks, national regulators, private banks, private equity firms, professional services organizations engaged principally in financial services and retail banks. In addition, we regularly work with retail intermediaries on the legal issues involved in the selling of financial services to consumers.
Experience has included advising:
- OPIC jointly with DLA Piper in connection with facilities to be granted to Acorn Holdings Limited, which is a leading real estate developer in Kenya for financing 10 mixed-use development projects
- Stanbic Bank Kenya Limited in a transaction involving real estate financing
- A top-tier commercial bank in Kenya in the financing of a used aircraft, which required a high degree of due diligence over the aircraft and security documentation proceedings
- East African Breweries Limited as Kenyan counsel advising the borrower as to Kenyan law facilities in connection with the financing of the construction of its new brewery in Kisumu
- Advising Radiant Energy Limited on the financing of two 40 MW solar power projects
- Advising CDC Group Plc, the lenders, on the financing of a 40 MW solar project in Malindi
- Ranked Tier 1 in Finance & Corporate (IFLR1000 2020)
- Ranked Band 1 in Banking & Finance (Chambers & Partners 2019)
- Ranked Tier 1 in Banking & Finance (The Legal 500 2019)
- Ranked Tier 1 in Finance & Corporate (IFLR1000 2019)
Lenders who provide loans do so with the paramount aim of being paid back. Towards this end, when borrowers take credit facilities, the lenders sometimes require them to provide guarantors as security for repayment of the facilities. The issuance of a guarantee usually provides additional security and comfort to the lender that in the event of default, it can either go after the principal borrower or the guarantor.
To many people, being an undertaker is considered an undesirable profession owing to its close proximity to death, something that is universally feared. Sadly, Insolvency Practitioners (IPs) are viewed with similar trepidation as their arrival typically heralds the demise of a company.
Many countries have introduced insolvency reforms in the recent past, partly in an attempt to enhance their legal frameworks and partly to respond to exigencies stemming from the COVID-19 pandemic. From a Kenyan perspective, amendments to insolvency laws have been made through recent Business Laws Amendment Acts but we also note that a draft Insolvency Amendment Bill, 2020 (Bill) was published on the BRS website, and contains some proposals that are worth pondering.
Environmental, social and governance (ESG) practices are increasingly influencing capital allocation decisions as investors move beyond financial performance to consider risk-adjusted returns. As a consequence of this shift, disclosures relating to these practices, referred to as ESG disclosures are gaining traction especially amongst listed companies.