Kenya Power is planning to spend 379 million shillings to purchase new cars from four different car dealers.
In a tender notice that the electricity company issued, the car dealers are set to supply KPLC with a fleet of vehicles, each dealer having a specific (different) supply tender.
The deal that was approved in July by Kenya Power will have Toyota Kenya (which was given the highest tender) supplying vehicles for 241.54 million shillings.
Simba Caetano Formula will supply cars worth 52.66 million shillings, Simba Corporation signed for 34.4 million shillings worth of cars, and Isuzu East Africa will supply cars worth 51.26 million shillings to Kenya Power.
Kenya Power has, however, not made it clear whether the vehicles will be used by the staff members or they will be used to carry out electric connections in the country.
Kenya Power made this notice despite the company lurking in debts with several creditors on its neck. “We are beginning to renegotiate part of the loans and convert them into long-term debt to bridge the negative liquidity gap,” said Kenya Power acting chief executive Jared Othieno.
The company currently has loans worth 59.6 billion shillings that have left it to opt for fresh short-term loans to refinance similar debts on long-terms.
Some electric projects have been stopped in several regions with Kenya Power acknowledging that it is facing financial constraints and increased and unbearable capacity. The latter forced KPLC to halt the signing of new power purchase agreements (PPAs) indefinitely.
For the year ended June 2018, KPLC’s revenue rose by 4.23 percent to 125.8 billion shillings due to increased customer base.
The revenue was then suppressed owing to higher costs incurred during power purchases and finances. These costs posted a 63 percent decline in the net profit to 1.92 billion shillings at the end of June.
Ag. CEO Jared Othieno said negotiations with creditors are underway to extend the loans repayment periods buy converting them from short-term to long-term loans.
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