Home Foreclosure Latest Cbe lockdown of giant factories sees no bidders | The journalist

Latest Cbe lockdown of giant factories sees no bidders | The journalist


– Only one bidder showed up for Ed-Stelar’s auction

– Addis Cable lockdown for 878m didn’t bear any fruit

Bidders failed to show up during the lockdown at the Addis Cable and Wire Manufacturing and Ed Stelar Foods factories, which were on sale for a floor price of 878.5 and 114.9 million birr, respectively.

With the bidding for both factories open on the same day, November 17, 2022, the bid for Ed Stelar attracts only one company, leaving the bankers managing the lockdown no choice but to cancel it. Allied Chemical, a company that is expanding its operations, is the only company that has shown interest in acquiring Ed Stelar.

Ed Stelar, a joint venture between Eshetu Belay and Dutch investor Hans Wasmoeth, is facing foreclosure after struggling to stay afloat for more than two years. In the past 12 months, it has used only about 6.6% of the company’s production capacity.

The company employed 200 people and produced 59,000 food products a day at its factory, which sits on 5,000 square meters of land in Sendafa, 35 km north of the capital, according to a company official.

Addis Cable and Wire Manufacturing is another factory threatened with foreclosure. Its executives say the company had the potential to meet 33% of the country’s cable and wire demand. The factory is located on a 27,000 square meter plot in Gelan and employed 1,600 workers on 27 production lines, according to Tewelde Gidey, the factory’s founder.

Established four years ago with a total investment of five billion birr, it went live in 2021. Tewelde says the company only remained in production for eight months, ceasing operations in the last three months due to the influx of foreign exchange and inputs. shortages.

The company, according to Tewelde, took out a loan of nearly 300 million birr, although it was seized for 878 million birr. “The bank has launched an estimated price, and we have already paid almost 197 million birr of the 300 million birr loan.”

However, an official in CBE’s communications department said he would not have seized the company if it had paid 197 million birr out of the 300 million birr borrowed.

“The bank would tolerate the company paying the rest. And if so, how could the factory have been seized for 800 million birr? We cannot provide any further information on this,” the official said.

For Tewelde, he does not understand the need to seize or close factories amid the government’s initiative to reopen previously closed factories and put them into operation. “I don’t understand why the company should close while the government continues to reopen factories that were closed due to losses.”