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Business : Development Bank of Ethiopia selling textile factory in foreclosure

Business News
January 10,2017

Development Bank of Ethiopia - source EBC
Development Bank of Ethiopia
Source : EBC

Development Bank of Ethiopia is selling Elsie Addis Textile factory in what is said to be a bid to recover over 900 million Ethiopian birr (the equivalent of about 40 million US dollars with the current rate of exchange) of loan issued to owners.

Fana Broadcasting cited Hailu Misganaw,acting corporate information and public relation director with Development Bank of Ethiopia, to report that the factory was unable to pay back its debts in accordance with loan agreement and was given thirty days notice to comply.

The factory which is located in Adama (Nazereth) – about 100 kilometers south east of the capital Addis Ababa – has been confiscated by DBE for four months now, added the report by Fana Broadcasting Corporation.

The owners, who are said to be two Turkish nationals, are not in the country currently. Eleven cotton suppliers from Afar, Benhsangul and Gambella regions of Ethiopia have claims of unpaid amount in more than 20 million Ethiopian birr.

The factory owes DBE a total of 933 million Ethiopian Birr including interest payments. It is not indicated as to when DBE is auctioning the factory.

While DBE is making the arrangement for the auction, indicates Fana report, workers will be under temporary DBE payroll. If DBE does not negotiate for the workers in the factory when ownership is transferred to a different entity, unlikely, they will no longer have their jobs.

As well, DBE intends to settle claims by cotton suppliers once it recovers its own money after the auction. Nothing is known as to how the claim by suppliers is established to be true.

A few months ago, another “investor” in Gabella region of Ethiopia disappeared without settling payments or paying workers wage.

Many foreign expatriate investors benefited from loan arrangement from banks in Ethiopia. The regime admitted corrupt practices among authorities but no concrete measures is taken so far.

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