DBE to foreclose on Ayka Addis
The Development Bank of Ethiopia (DBE) is to foreclose on the bankrupted Turkish textile company – Ayka Addis Textile & Investment Group – in the coming one month, The Reporter has learnt.
“The state owned bank will begin asset valuations of the plant soon,” a senior manager at the Bank told The Reporter.
In this regard, the valuation process takes up to one month after which the factory will be available for sale.
Once the process is completed, the factory will be up for foreclosure sale for two consecutive times in case there were no takers.
“When the foreclosure is made, the borrower or former owners of the factory have a stake in which they can claim if there is any possible damage,” said the manager.
It is to be recalled that the troubled Ayka failed to pay 2.8 billion birr debt from the Bank and another 300 million birr from Commercial Bank of Ethiopia (CBE).
Since then, DBE along with other stakeholders were trying to solve the problem amicably. However, the factory could not survive its quandary.
Ayka Addis – one of the iconic factories which represent Turkish investment in Ethiopia – was established eight years ago in Alemgena, 25 kilometers East of Addis Ababa, employing over 7,000 workers. The factory was founded by Turkish investors with an authorized capital of one billion birr.
Following this, DBE has tried to take over the management of the factory with the mere purpose of solving the aforementioned problems. Yet, it was impossible to uplift the factory from its failure. In fact, according to sources from DBE, the original owners of the factory, Yusuf Aydeniz, is reported to have left Ethiopia.
To reclaim the money it lent to Ayka, DBE will use two options; foreclosure on the property or a bidding process.
“If the foreclosure fails, the Bank will proceed to the bidding process,” the same source told The Reporter.
However, if both option failed to bear fruit, DBE will be forced to administer the factory under its asset management; Ethiopian Capital and Investment PLC.
Ethiopian Capital was established a year ago with a primary mandate of asset management, tax and settling payments to third parties on behalf of factories confiscated from borrowers by DBE. It also purchases raw materials on behalf of the aforementioned factories.
The Enterprise, which has a 10 million birr capital, is owned by DBE.
It is to be recalled that Else Addis Textile Factory was the first Turkish company to default and was handed over to Ethiopian Capital after the owners of the companies failed to pay their debt.