Cereals company tied to Kenyan tycoon Ngugi Kiuna faces receivership over $28.6 million debt

Key Points

• Proctor & Allan Limited enters receivership after failing to repay a $28.6 million loan to KCB Group, reflecting Kenya’s business financial strain.
• Receivers Ponangipalli Venkata Ramana Rao and Swaroop Rao Ponangipalli appointed to oversee financial restructuring.
• Business setbacks highlight the challenges facing Kenyan firms amid rising competition, economic pressures, and mounting debt.

Proctor & Allan Limited, a leading cereal manufacturer with Kenyan businessman Ngugi Kiuna among its shareholders, has been placed under receivership after failing to repay a $28.6 million loan owed to KCB Group. The move reflects the growing financial strain on Kenyan businesses as economic pressures mount.

The High Court appointed Ponangipalli Venkata Ramana Rao and Swaroop Rao Ponangipalli as receivers, effective Monday, Feb. 24. Their appointment shifts control of the company’s assets and operations from its directors to the receivers, who will oversee financial restructuring. Creditors and other claimants have until Mar. 31, 2025, to submit their claims.

Mounting debt and financial challenges

Proctor & Allan, one of Kenya’s oldest food processors, has been in operation since the 1940s, producing cereals such as cornflakes, oats, and porridge mixes. The company took out the Ksh3.7 billion ($28.6 million) loan from KCB in 2015 to finance the construction of a manufacturing facility in Limuru. However, it has since struggled to keep up with its financial obligations.

Rising competition, high taxes, and broader economic challenges have worsened the company’s financial position. Its receivership is the latest in a series of corporate failures in Kenya, following similar struggles at cigarette manufacturer Mastermind Tobacco and automobile body firm LSHS.

Ownership and business impact

Proctor & Allan’s ownership includes prominent figures in Kenya’s corporate scene. Major stakeholders include Zephania Mbugua, former chairman of East African Cables; Edward Njoroge, former CEO of KenGen; and Ngugi Kiuna, a seasoned investor with stakes across multiple industries. The company’s largest shareholder, Nefira Holdings, controls 76.82 percent.

With the receivers now in charge, the firm’s directors have lost decision-making authority. This situation underscores the financial pressures weighing on Kenyan businesses, as many struggle with liquidity constraints, economic uncertainty, and mounting debt.

Another setback for Ngugi Kiuna

The receivership of Proctor & Allan marks another challenge for Ngugi Kiuna. Just months ago, he won a legal battle against Dutch brewer Heineken after Kenya’s Supreme Court upheld a Ksh1.79 billion ($13.1 million) award to Maxam Limited, his beverage distribution company.

The court, in a ruling led by Chief Justice Martha Koome, found that Heineken unlawfully ended its distributorship agreement with Maxam. Since its founding in 2006, Maxam had played a key role in expanding Heineken’s presence in Kenya, Tanzania, and Uganda.

Beyond Maxam, Kiuna holds an 11.2 percent stake—equivalent to 2,192,926 shares—in BOC Kenya, a leading industrial gas manufacturer. Despite his extensive business interests, the setbacks at Proctor & Allan highlight the volatility of Kenya’s business environment.

As the receivership process unfolds, all eyes will be on how the appointed managers steer Proctor & Allan’s future and whether a viable restructuring plan can keep the company afloat in Kenya’s competitive food processing industry.