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East Africa: Restructuring Quarterly Bulletin – November 2023

13 December 2023
– 20 Minute Read



  • This edition of our quarterly restructuring bulletin highlights restructuring developments in Kenya, Mauritius and Tanzania.
  • It also provides collated information relating to restructuring across Europe, the United Kingdom, the United States, and Asia and highlights ongoing developments relating to cryptocurrency firms. (There have been increasing actions by US regulators such as proposed receivership and ongoing court proceedings against the operations of some of the cryptocurrency firms in the country.)



In the November edition of our quarterly restructuring bulletin, we highlight the following developments in relation to:

  1. Economic overview
  2. Corporate updates
  3. Distressed companies in the press
  4. Regulatory developments
  5. Interesting developments in case law

1. Economic overview

  • In alignment with the recently enacted Privatisation Act 2023, the National Treasury and Economic Planning Ministry (Ministry) in Kenya has proposed privatizing several state-owned entities, including the Kenyatta International Convention Centre, the Kenya Pipeline Company and the New Kenya Cooperative Creameries. The Ministry believes that this move will increase government revenue and ease the strain on resources. The public has been invited to provide feedback on the Privatisation Programme by December 11, 2023. There is a High Court order staying the public participation process until 6 February 2024. To read more, click here and here.
  • The Monetary Policy Committee increased the Central Bank of Kenya rate from 10.5 percent to 12.5 percent to address rising inflation and the depreciation of the Kenyan shilling against major currencies like the US Dollar. Despite a slight drop in inflation to 6.8 percent from 6.9 percent, the CBK warned of continued inflation risks. Additionally, the Kenyan shilling has been under pressure due to high demand for the US dollar. To read more, click here.
  • Kenya’s manufacturing sector faced a severe growth slowdown due to tax increases, elevated import expenses for raw materials, and currency challenges. The sector expanded minimally by 1.5 percent in the second quarter, while food production declined, and food imports surged notably. To read more, click here.

2. Corporate updates


  • There were five petitions filed for the liquidation of companies by the court in September and October 2023. According to the Business Registration Service official report, 46 companies are undergoing liquidation processes (38 with petitions for liquidation and 8 undergoing voluntary liquidation) in the fiscal year that concluded in June 2023, mirroring the numbers from the preceding period.
  • There were no reported companies under administration in September and October 2023, however, petitions were filed to place two companies under administrative receivership. Based on the above findings, administration continues to be underutilised as an alternative to liquidation.
  • Jumia Technologies (Jumia), a leading online retailer, has recently announced that it is cutting costs by reducing its workforce, exiting some grocery sectors, and trimming non-e-commerce-related delivery services. Jumia currently operates its food delivery business in seven African countries being Nigeria, Kenya, Uganda, Morocco, Tunisia, Algeria, and Ivory Coast. Its food delivery arm currently contributes around 11 per cent to its overall merchandise value. To read more, click here.

3. Distressed companies in the press

  • Sendy Limited (Sendy) – Sendy, a logistics firm has gone into administration. The High Court appointed Peter Kahi of PKF Consulting as the administrator. Peter Kahi will oversee the following companies that are within the Sendy Group of Companies: Sendy Kenya Freight Limited, Sendy Limited, Sendy Store Limited and Sendy Kenya Marketplace Limited. To read more, click here.
  • Twiga Foods (Twiga) – Twiga, an agritech company, has prevented Incentro Africa Limited, a cloud services provider, from winding it up over an alleged debt of KES 39 million. Twiga obtained temporary orders, contesting the debt’s validity. They argued that pursuing liquidation instead of other remedies outlined in their agreement was unreasonable. To read more, click here. Further, Twiga has received an additional undisclosed amount from four investors (Creadev, Juven, TLcom Capital Partners, and DOB Equity) as part of a business refinancing and restructuring support that seeks to repay more than 100 supplies. To read more, click here.
  • Cytonn High Yields Solution (CHYS) – The High Court permitted the official receiver to take control of three Nairobi properties linked to Cytonn, which entered liquidation in January. This decision allows the receiver to reclaim funds from these properties unless loans to related entities are repaid. The court also authorized control over 12.5 percent shares in Superior Homes (Kenya) held by another Cytonn-affiliated entity. To read more, click here.

4. Regulatory developments

The following statutes in parliament were passed recently have an impact on insolvency:

  • The Insolvency Amendment Bill No. 36 of 2023

The Insolvency Amendment Bill No. 36 of 2023 (Bill) seeks to amend the Insolvency Act No. 18 of 2015 to provide a fast-tracked process for the resolution of insolvency cases, specifically targeting small and medium-sized enterprises. The proposed amendments will allow for an institution to maximize the value of its distressed assets by allowing a quick sale or re-organisation and therefore benefiting creditors and shareholders by ensuring that they receive the maximum possible value of their investments. The expedited procedure will also be cost-effective due to the statutory time limits for resolutions. To access the Bill, click here.

  • The Privatization Act, 2023

On 9 October 2023, the Privatization Act, 2023 was assented into law, repealing the 2005 Privatization Act, in efforts to speed up the privatisation of underperforming state-owned entities. As highlighted in the previous bulletin, available here, the new legislation is intended to encourage increased private sector participation in the economy, transferring production and services from the public to the private sphere. To read more, click here.

  • The Finance Act, 2023

On 1 September 2023, the tax on the income derived from the transfer or exchange of digital assets at the rate of 3% took effect. Introduced under the Finance Act 2023, the tax will affect digital assets which include anything of value that is not tangible, cryptocurrencies, token codes and numbers held in digital form, which can be exchanged with or without consideration and can be transferred, stored or exchanged electronically. To read more, click here.

5. Interesting developments in case law

Kimeto & Associates Advocates & 3 others v KCB Bank Kenya Limited & 3 others; West Kenya Sugar Company Limited (Interested Party) (Insolvency Petition E004 of 2019) [2022] KEHC 11902 (KLR) (Commercial and Tax)

The High Court rejected a bid to reinstate an insolvency lawsuit against Mumias Sugar Company (Mumias) by Kimeto & Associates Advocates. The firm initially withdrew its case and later substantiated the decision to withdraw based on coercion and threats. Justice Josephine Mong’are stated that only a fresh case can be filed. The firm sought KES 76 million from Mumias for having represented them in court cases.

The notice to withdraw the case came after Jaswant Rai, an interested party through West Kenya Sugar Company also withdrew all the applications that were pending in the High Court and the Court of Appeal. Other creditors involved in the case included Vartox Resources Inc., Khaminwa & Khaminwa Advocates, and Wekesa & Simiyu Advocates. To read more, click here.


1. Economic overview

On 19 September 2023, the World Bank released the economic update titled, the Efficiency and Effectiveness of Fiscal Policy in Tanzania. According to this update, the Gross Domestic Product growth rate for Tanzania reached 4.6 percent in 2022 and is anticipated to increase to 5.1 percent in 2023. This growth is being driven by a more favourable business climate and the implementation of structural reforms.

However, the forecast suggests that growth will average around 5.8 percent over the medium term. This moderate growth is due to factors such as weakening demand, persistent inflationary pressures, and elevated interest rates, which collectively hinder a more robust expansion of the economy. To read more, click here.

2. Regulatory developments

  • New Tanzania Investment Regulation GN No. 477 of 2023.

In an effort to stimulate domestic investments and boost economic growth, the Government of Tanzania recently repealed the 2002 Tanzania Investment Regulations (TIR) and introduced the new Tanzania Investment Regulations GN No. 477 of 2023. These regulations aim to create a favourable environment for investors and enhance transparency, and accountability.

Key changes include a redefined role for the Board of the Tanzania Investment Centre, established procedures for strategic investment applications, and easier access to guarantees and transfers for mining and petroleum enterprises. The new regulations also streamline permit issuance, introduce appeal mechanisms, and establish dispute resolution procedures. Existing actions under the previous TIR are recognized unless they conflict with the new regulations. To read more, click here.

3. Distressed companies in the press

Yapi Merkezi, the Turkish contractor responsible for the construction of the renowned Standard Gauge Railway, is currently engaged in discussions with banks to restructure loans amounting to approximately USD 1 billion. This move comes in the wake of a dispute over payments related to a project in Tanzania, which has adversely affected the construction company’s cash flow.

The contractor utilized these loans to facilitate the construction of hundreds of kilometres of railway lines in Tanzania. As of September, the company carries a debt of around USD 3.2 billion owed to various lenders. The majority of the loans earmarked for restructuring were originally obtained from state-owned banks in Turkey. To read more, click here.


The Government of Mauritius has, through measures taken to support the economy during and after the COVID period, more especially through key legislative initiatives, enabled the country to not only address immediate needs but also prepare for sustainable growth. Specifically, Mauritius’s financial services industry is benefitting from the changes brought about in the wake of the pandemic and is currently experiencing renewed interest from investors.

1. Variable Capital Companies

Currently, there are around five Variable Capital Companies (VCC) authorized as funds by the Financial Services Commission with several other applications in the pipeline. The Variable Capital Companies Act, which came into force only last year, in 2022, has recently been amended to allow a VCC to act as a family office.

It is expected that a Family Office VCC may, through its special purpose vehicles, cater for the unique financial, investment, and administrative needs of high-net-worth families and individuals. The prompt intervention of the legislator is a clear indication of the dynamism and interest in the structuring product, which is gaining traction amongst operators and investors alike, both within the local economy and the international markets.

2. Judicial administration

The rise in companies entering judicial administration, notably during the pandemic from July 2020 to June 2021, signals caution as the economy aims for recovery despite efforts to foster investment and growth. This regime, while not new, reflects challenges faced by Mauritian businesses, particularly in Information Technology, marketing of electrical and electronic devices, as well as accessories, prompting a surge in administration applications.

However, creditor flexibility in debt repayment extensions, bolstered by government and institutional aid, prevented widespread insolvency. The past three years enabled businesses to understand the importance of restructuring tools like administration, enabling companies to navigate crises and evade liquidation, emphasizing the significance of contingency planning for businesses.

3. Case law updates

  • ENL Limited & Anor vs Independent Commission Against Corruption 2023 SCJ 190

The Supreme Court issued a judgment clarifying the issue of representation of domestic companies before Mauritius courts. This was sparked by objections raised by the Independent Commission Against Corruption to the effect that the applicant companies had not given a proper mandate to their representatives.

The following points are the key takeaways from the judgment:

  • Previous judgments relying on the Deposit of Powers of Attorney Act, 1928 (Act) to determine issues of representation for Mauritian companies were incorrect and held to be irrelevant;
  • Judgments based on Article 421 of the Code de Procédure Civile were deemed incorrect as this article had been repealed through the Revision of Laws Act;
  • The matter of company representation in court is governed by agency laws, with the provisions of the Companies Act, 2001, as amended, also playing a role;
  • A company’s board of directors has the authority to delegate a person to initiate legal proceedings on the company’s behalf;
  • The court will expect a board resolution appointing a specific individual as the company’s representative, placing the burden on the company to prove that its representative has been properly authorized; and
  • Such a board resolution may be passed to ratify all actions taken by the representative who initiated the legal proceedings.

4. Conclusion

Whilst there are grounds for optimism given the measures taken to strengthen the existing framework to prepare for growth, caution is also required and being urged given the fragile state of the local economy.

In both instances, the statutory and regulatory framework in Mauritius has been proven to be robust and is constantly evolving to remain competitive and continue enabling the setting up of new businesses and rescuing those entities which would in earlier times, have inevitably gone down the road of dissolution.


In this section, we highlight some of the key regulatory and corporate developments in the restructuring space around the world. We have collated information on:

  • Europe
    • Germany
    • France
    • Spain
  • United Kingdom
    • Regulatory updates
    • Corporate insolvencies
    • Company updates
  • United States of America
    • Corporate Updates
  • China
  • Case law updates
  • Cryptocurrency insolvencies and restructuring
    • Interesting Updates – proposed regulations and case law


In the third quarter of 2023, EU business bankruptcies dropped by 5.8% compared to the previous quarter but remained higher than pre-pandemic levels. To read more, click here.

The upward trend in European companies facing insolvency will likely continue until at least late 2024. This surge is attributed to increased interest rates and stricter financing circumstances, placing substantial strain on small businesses, especially in cyclically influenced sectors like retail and construction. To read more, click here.

Europe’s solar industry has warned of a situation where European solar photovoltaic (PV) manufacturers risk going into bankruptcy as solar PV prices have reached record lows. Consequently, this would hurt the European Union’s goal of reshoring 30GW of the solar PV supply chain. To read more, click here.

  • Germany

Germany’s Federal Statistics Office (Destatis) reported a notable rise in insolvency applications and bankruptcy declarations among both businesses and individuals. October 2023 witnessed a 22.4% increase compared to the previous year, continuing a trend of double-digit rises since June. Destatis specified that these statistics cover businesses undergoing an orderly insolvency process, distinct from those forced into bankruptcy due to financial inability or other causes. To read more, click here.

  • France

Corporate bankruptcies in France increased moderately to 51,160 by the end of September 2023, rising from 50,671 in August. This increase reflects a catching-up trend observed across various economic sectors and business sizes, although it is less pronounced for microenterprises and companies with undetermined sizes. To read more, click here.

  • Spain

In the third quarter of 2023, Spain saw a reduction in bankruptcies, totalling 1,349 companies. The highest recorded figure reached 2,854 companies, while the lowest was just 11 companies. To read more, click here.

United Kingdom

Regulatory updates

  • On 1 November, HMRC released guidance on supporting financially distressed companies in restructuring their finances, focusing on assistance for restructuring plans under the UK Companies Act 2006. To access the guidance, click here.

Corporate insolvencies

  • From July 1 to September 30, 2023 (Q3 2023), there were a total of 6,208 (adjusted for seasonal changes) documented company insolvencies. These included 4,965 creditors’ voluntary liquidations (CVLs), 735 compulsory liquidations, 466 administrations, 41 company voluntary arrangements, and one receivership appointment.
  • In Q3 2023, despite a 2% decrease from the previous quarter, company insolvencies were 10% higher compared to Q3 2022. Compulsory liquidations and administrations surged to levels seen before the COVID-19 pandemic. The rate of companies entering insolvency increased to 52.4 per 10,000 active companies between October 2022 and September 2023, up from 46.9 in the preceding 12 months. To read more click here.

Company updates

  • Buckingham Group (Group) – the Group, a tier one contractor, collapsed in September, owing over £108 million due to substantial losses on sports and leisure contracts, inflation pressures, and setbacks in civil construction projects. Despite attempts to sell the business and assets, only the rail division was sold to Kier for £9.6 million. To read more, click here.
  • Miskin Manor Hotel – The Miskin Manor Hotel in Rhondda Cynon Taf has entered administration, citing cashflow pressures and leading to last-minute venue searches for couples. To read more, click here.
  • Pfizer Inc. (Pfizer) – Pfizer plans to reduce its workforce by 500 employees at its Kent, UK site as part of ongoing cost-cutting measures. This decision comes after the company reported its first quarterly loss since 2019, largely due to decreased demand for its COVID-19 products. To read more, click here.
  • Safestyle UK (Safestyle) – Safestyle, a Bradford-based double-glazing windows firm, has entered administration. The company’s share price had been declining due to unfavourable trading updates, leading to unsuccessful attempts to find a buyer or secure fresh funding. To read more, click here.
  • SKF – SKF, a global manufacturer of bearings, seals, and lubrication management, is set to close its Luton factory by the end of next year. The closure is not only significant for SKF but also represents a setback for the local manufacturing sector in Luton. To read more, click here.
  • Squibb Group (Squibb) – Squibb, a recognised leader in the field of controlled demolition, has applied for administration. While a company voluntary arrangement meeting was initially planned, it was suddenly retracted, and the company opted for an administration process instead. To read more, click here.
  • Victoria Plum – Victoria Plum, a major UK online bathroom retailer, has been acquired in a pre-pack administration deal by AHK Designs for an undisclosed amount. AHK Designs, the e-commerce retailer that owns and furniture seller Cox & Cox, will now take over Victoria Plum, incorporating its 300+ workforce. To read more, click here.
  • WiggleCRC – WiggleCRC, the online sports retailer has entered administration after losing financial support from its parent company, Signa Sports United (Signa). Signa is facing challenges in liquidity and profitability, prompting a restructuring. To read more, click here.

Case law updates

In a landmark decision, the English court has guided the common practice of substituting a creditor as a petitioner in a winding-up petition first, with arguments about the creditor’s standing addressed later. In March 2021, Citibank NA London (Citibank) filed a winding-up petition against Liberty Commodities (LCL), supported by creditors White Oak Commercial Finance Europe (Non-Levered) Limited (White Oak) and NPS (40GP) Limited (NPS). After settling with LCL, Citibank sought to dismiss the petition, while the supporting creditors applied to be substituted.

LCL argued that its challenge to the standing of the supporting creditors, based on disputed debts, should be addressed before substitution. The court disagreed, upholding the practice of ‘substitution first, standing later.’ NPS, with partially undisputed debt, was substituted as the petitioning creditor. The court clarified that if White Oak had been the sole creditor seeking substitution, it would have ordered substitution and scheduled a final hearing based on evidence and submissions.

The key takeaway is the court’s pragmatic approach, allowing the petition to proceed and deferring the standing issue until it has sufficient evidence and time for a proper hearing. To read more, click here.

United States of America

Overall, there was a 13% increase in total bankruptcy filings, with business bankruptcies surging by almost 30% in the twelve months leading up to September 30, 2023. Annual bankruptcy filings reached 433,658 in the year concluding in September 2023, a notable rise from the 383,810 cases recorded in the preceding year. This marks the third consecutive quarter of rising total bankruptcy filings after more than ten years of decline. To read more, click here.

Corporate updates

  • Air Methods – Air Methods, a medical helicopter company, filed for bankruptcy protection, aiming to alleviate USD 1.7 billion in debt. The company faced challenges stemming from increased interest rates, elevated labour expenses, and a recent US prohibition on unexpected medical bills. To read more, click here.
  • P. Morgan Asset Management (JP Morgan) – J.P. Morgan is set to dissolve two exchange-traded funds (ETFs): JPMorgan Sustainable Consumption ETF and JPMorgan Social Advancement ETF. Shareholders can trade their shares on Nasdaq until December 15, 2023. To read more, click here.
  • Proterra – Proterra Inc. and Proterra Operating Company Inc., an electric vehicle and powertrain manufacturer, are in a voluntary Chapter 11 bankruptcy process. Volvo Group has been selected as the winning bidder in an auction for the business and assets of the Proterra Powered business unit at a purchase price of USD 210M. To read more, click here.
  • IndiEV Inc. (an electric-vehicle startup), Starboard Group (a major Wendy’s franchisee), Sunlight Financial (a company providing home solar system financing), Timber Pharmaceuticals LLC (a medical dermatology company) and Verde Building Solutions Inc. (a construction company) have also initiated Chapter 11 bankruptcy protection from creditors.


  • WM Motor Technology Company Limited (WM Motor) – the electric vehicle startup, WM Motor, has commenced a pre-restructuring process, signalling challenges in the highly competitive EV market in China. This move follows the acceptance of its pre-restructuring application by a Shanghai court on October 7. To read more, click here.
  • China Evergrande Group (Evergrande) – Evergrande has presented a debt restructuring plan to offshore bondholders, proposing an exchange of their debts for a 30% equity stake in two of its Hong Kong-listed subsidiaries. This comes after a Hong Kong court granted Evergrande a final extension until 4 December 2023 to present a restructuring plan and avoid liquidation. To read more, click here.

Cryptocurrency insolvencies and restructuring

The following cryptocurrency firms or companies exposed to cryptocurrencies have recently appeared in the press:

  • Chainalysis Inc. – Blockchain data company Chainalysis Inc. laid off 15% of its employees, contributing to the recent series of job reductions within the cryptocurrency industry. To read more, click here.
  • Bittrex Global – The cryptocurrency exchange company has revealed its intention to gradually cease operations, initiating the suspension of trading activities on 4 December 2023. Bittrex Global notified users holding US dollars to convert their funds into euros or cryptocurrency by 4 December 2023 to avoid potential inability to withdraw these assets. To read more, click here.
  • Celsius Network (Celsius) – Celsius, a crypto lender, revised its business plans post-bankruptcy, opting to focus solely on bitcoin mining due to concerns raised by the US Securities and Exchange Commission about its other proposed business operations. To read more, click here.
  • Core Scientific Inc. (Core)– Core has received approval to seek votes on its bankruptcy plan, aiming to cut a substantial amount of debt. To read more, click here.
  • Futures Exchange Trading Limited (FTX) – FTX, a collapsed crypto exchange company, was granted permission to liquidate its digital assets to repay its creditors by a bankruptcy court. In the court filing, FTX stated that its digital assets such as Solana, Bitcoin and Ether amount to about USD 3.4 billion. To read more, click here.
  • Patricia Technologies (Patricia) – The Nigerian digital asset trading platform faced suspicions of an exit scam after experiencing a hack earlier in the year, causing distress among users due to withdrawal suspensions. The platform then launched a new token and redesigned its platform, intending to compensate users affected by the hack. To read more, click here.
  • Robinhood Crypto LLC (Robinhood) – Robinhood experienced a substantial decrease in revenue from crypto trading during the third quarter. The investing platform reported a decline in transaction-based earnings from cryptocurrencies, falling to USD 23 million — a significant 55% drop from the previous quarter. To read more, click here.

Interesting updates – proposed regulations and case law

United States

  • The United States Department of the Treasury announced that it has reached a settlement with Binance Holdings Ltd. on the regulatory and compliance framework applicable to the virtual currency industry. To read more, click here.


  • The Australian government has revealed a plan to regulate crypto exchanges and digital asset platforms subject to existing financial service laws. Additionally, the government aims to mandate financial service licenses for platform operators, especially targeting those holding over $1,500 of an individual’s assets or $5 million in total. To read more, click here.

Hong Kong

  • In the case of Re GatecoinHong Kong’s Court of First Instance held that cryptocurrency has all the traditional characteristics of a property and is to be properly regarded as so. The court did not characterise the nature of cryptocurrency. Specifically, whether it is a thing in possession (chattel), whether rights are associated with intangible property, or if there is a new middle category that is neither of the two. To read more, click here.