, NAIROBI, Kenya, Jul 29 – The Kenya Planters Cooperative Union (KPCU has reached for an out of court agreement with the Kenya Commercial Bank (KCB) over payment of the union’s debt of Sh644 million.
KPCU chairman William Gatei said if the board’s proposal is approved by the members during an Annual General Meeting slated for Wednesday this week, it could see the union’s receivership lifted in the next two weeks.
The new development between the two parties could mark a turning point of the once giant coffee farmers union which collapsed due to gross mismanagement.
“We have discussed an out-of-court settlement and we are now waiting for the farmers to endorse this at our AGM. This is what we have been waiting for because we believe there is a future for this big union,” Gatei said.
KPCU was placed under receivership in October 2009 after it failed to pay the money to KCB and other creditors.
Deloitte consulting firm was later appointed as receiver managers over failure to repay the debt.
Gatei however did not provide a breakdown on how the out of court settlement will be carried out, but said all the information will be revealed during the AGM.
He told journalists that KCB had agreed to settle on a lower figure if the shareholders agree to approve the deal.
Gatei disclosed that KPCU had so far collected Sh243 million from rental income adding that this was a clear sign that the union would manage to clear the debt.
He added that the future plans is for the board to negotiate in an international strategic partnership with a commodity trading company from Singapore, a deal that will see farmers get 50 percent more for their produce than what they have been getting.
Recently, Parliamentary Committee on Agriculture recommended that KPCU and Pyrethrum board among others be given funds to revive them.