Vaell Placed Under Administration Following Default on Creditors

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Vehicle and Equipment Leasing Limited (Vaell) has been placed under administration after failing to meet its obligations to creditors, totaling Sh1.1 billion. The move aims to revive the company’s operations under the administration’s management, with liquidation being considered as a last resort to facilitate creditor repayment.

The Official Receiver in Insolvency, an agency under the Office of the Attorney General, has assumed control of Vaell’s operations, as announced in a notice dated January 23. The company had utilized various assets, including motor vehicles and machinery worth Sh408.3 million, as collateral.

The preferential creditors, prioritized for payouts from Vaell’s cash flows or asset sales, include the Kenya Revenue Authority, which owed Sh445 million. Other major creditors include OikoCredit, ABC Bank, Consolidated Bank of Kenya, SBM Bank, Co-operative Bank of Kenya, Kingdom Bank, and Spire Bank.

Secured creditors are owed Sh994.1 million, while unsecured creditors, facing higher risks of loss, are owed Sh146.2 million.

The voluntary administration was initiated by Vaell’s directors, Paul Waruingi Njeru and Wang’ombe Gathondu. The company, jointly owned by Quipbank Limited and Paul Waruingi’s Investment and Charitable Trust Fund, faces the possibility of shareholders being sidelined as creditors’ claims take precedence.

During administration, the company will be maintained as a going concern to maximize creditor recovery. The law mandates administrators to explore measures for the company’s rescue, with liquidation being considered as a last resort.

Recent economic challenges, including high interest rates, increased taxes, and operating costs, have led to several companies, including Vaell, Mastermind Tobacco (K) Limited, and logistics firm Sendy, being placed under administration. These developments underscore the broader impact of economic turbulence on businesses.