Kenya’s currency printing firm De La Rue is undergoing financial difficulties and its warning that it may not be able to survive in the near future.
In an article by the Business Daily, the company says its debts has risen at a time when its business has suffered from a mix of higher costs, customer defaults and lower margins.
The company’s debt rose to Sh22.4 billion in September from Sh14.1 billion in March.
De La Rue,a UK firm that operates locally through its subsidiary De La Rue Kenya EPZ Limited fears that it could breach agreements set by its banks who could deny it access to additional credit facilities.
“Therefore, we have concluded there is a material uncertainty that casts significant doubt on the group’s ability to continue as a going concern,” said De La Rue during their announcement of results for the half year ended September.
It further stated that the directors have suspended future dividends and management is focused on delivering the company turnaround plan.
The Kenyan government acquired a 40 percent stake in April for Sh658 million which is a minority stake but still this could lead to Kenya facing funding constraints despite the likelihood being transferred to a new owner if the parent company is liquidated.