Court okays liquidation of Royal Swiss Bakery over Covid-19 woes – Business Daily
Past delivery of trucks to Royal Swiss Bakery for bread distribution. PHOTO | NMG
The High Court has allowed the liquidation of Royal Swiss Bakery after the bread manufacturer failed to recover from the effects associated with Covid-19 in 2020.
Justice David Majanja allowed the application by the manufacturer to be placed under liquidation to forestall further deterioration of the firm’s remaining assets and the likelihood of escalation of costs and expenses, which would diminish its value.
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The company said it scaled down its operations in March 2020 due to the Covid-19 crisis when the government placed a ban on movement in the country, and eventually ceased operations.
Royal Swiss Bread, the maker of brands such as Swiss Toast and SGR Bread, said it was unable to meet its financial obligations as the company was not generating any income.
“I, therefore, hold that it is in the interest of the company and its creditors to liquidate the Company,” Justice Majanja said as he appointed Orlando Mario Da Costa-luis as the interim liquidator.
The liquidation order will take effect on January 31, 2023, and the court directed the liquidator to engage the company’s landlord with a view to resolving the rent dispute, which stood at Sh4.8 million.
The director and sole shareholder of the manufacturer Mr Omar Said Suleiman revealed that the company’s assets have a book value of Sh188.7 million and an estimated realisable value of Sh139.7 million while the total liabilities owed by the company amount to Sh265 million.
The court noted that all creditors of the company were not opposed to the liquidation.
Some of the creditors include Bima Manufacturing Ltd, King Plastic Industries Ltd, Broadway Petroleum Ltd, First Community Bank, NCBA Bank, Redavia Kenya Asset Ltd, KCB, Kitui Flour Mills Kenya Ltd and Pembe Flour Mills Ltd.
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Mr Suleiman said he had explored all possibilities of reviving the business including seeking financing and injecting more capital but it has been unsuccessful.
The company was registered in 2015.
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